Meaning of underhedged | Babel Free

Definitions

On a hedged a transaction, having too much cash flow committed to rated note debt coverage, leaving too little available for the income notes.

Examples

“Instead, it was a collective failure of the governing five-man executive committee that over the years became so fixated on increasing the firm’s book value — and expecting the stock price to follow — that it lost sight of the concentrated, underhedged exposure to the home mortgage market that left Bear vulnerable.”

CEFR level