Tradition Energy's Parent Company Places Record Weather Futures Trade

February 20, 2009

For Immediate Release

STAMFORD, CT (February 20, 2009)—Tradition Energy, one of the nation’s largest energy management advisors, today announced that their parent company has placed the largest CME trade volume for a specific weather futures contract in a single city.

Tradition’s US weather derivatives division completed a significant risk transfer via Dutch auction and direct placement on behalf of an end-user looking to mitigate weather risk for the London area. The auction reached its full capacity of 3,000 lots plus an additional 2,000 lots at the level 305, which is equal to £100,000 per degree-day. This capacity increased the open interest on the Chicago Mercantile Exchange (CME) by 588%, the largest-ever volume for a specific weather futures contract in any one city on a given day.

Offers were solicited for heating degree-day (HDD) swaps for the period of March 2009 for London Heathrow (LHR). Formal proposals were submitted to Tradition (formerly TFS Energy) and executed on Wednesday, February 18, 2009.

“We are extremely pleased to have successfully brokered such an auction. To increase activity by such a large percentage truly exemplifies the growing interest in this product and the depth of the market,” commented Kendall Johnson, a Managing Director and Global Head of Weather Derivatives for Tradition.

Tradition has hosted numerous auctions ranging in magnitude from $1 million to upwards of $100 million of transferred risk. Tradition is a pioneer in the Dutch auction space and has been responsible for placing weather risk in the U.S., Europe and Asia. Its weather derivatives desks are located in Stamford, London, and Sydney.

Editor Notes on the Auction Style – Dutch Auction
For the London Heathrow (LHR) auction, offers were accepted in a minimum bid size of 100 lots, with increments of 50 lots thereafter, and cleared on the CME. When a level was deemed to be acceptable, no less than a minimum transaction size of 500 lots was executed through the auction. The levels were posted on the CME.

About Tradition Energy

Tradition Energy is one of the world’s largest energy management advisors, helping commercial, industrial and governmental organizations manage electricity and natural gas costs in regulated and volatile deregulated energy markets. Tradition Energy is the retail arm of Tradition’s (formerly TFS) award-winning wholesale energy brokerage division, with eight offices worldwide, over 300 energy specialists, and in the energy business since 1986. Recently, Tradition garnered 17 first place awards in Energy Risk and Risk magazine’s 2010 Broker Rankings. Globally, Tradition is a leading inter-dealer broker in financial and commodity-related products with a presence in 27 countries and over 2,400 employees. For more information, please visit www.traditionenergy.com.

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