In a move that reflects the growing caution of derivatives users, Air Products and Chemicals Inc. said it had terminated two currency hedges, though they were "consistent with the company's financial policies and practices."
Air Products was among a handful of companies that reported derivative losses in the past two months, stemming from the use of leveraged interest rate swaps.
The currency hedges appeared to be plain-vanilla derivatives. But losses from the more exotic leveraged swaps at Air Products, Procter & Gamble Co., and others fueled calls for increased scrutiny and regulation of derivatives dealers and users alike, creating a chilling effect in the derivatives market.
Early last month, Air Products reported an after-tax charge of $60 million for the second quarter on five leveraged interest rate contracts with Bankers Trust New York Corp., its dealer. In mid-May, the company said it expected to take an additional after-tax charge of about $9 million on the same swaps in the third quarter.
Wednesday, the Allentown, Pa.-based company said the termination of the two nonleveraged contracts …