Capital MarketsTechnology
November 5, 2020

A Technology Tool to Help Corporate Bond Issuers

BondCliQ’s solution can give companies more insight into which dealers are supporting secondary trading. A lack of liquidity in the secondary market for investment-grade corporate bonds remains a source of frustration for many corporates that have issued record amounts of debt in the wake of the financial crisis and, more recently, during the pandemic. A key reason for the liquidity problem is that broker dealers, including underwriters, have reduced their inventories of investment-grade corporate debt, in part because of regulations mandating…
FXTalking Shop
November 5, 2020

Talking Shop: Taking the Pulse on Forward Points in Balance Sheet Hedging Programs

Member question: “How do those with balance sheet hedging programs account for forward points—are they included in earnings before interest and taxes (EBIT), below the line, etc.? “We are considering implementing a balance sheet hedging program for net liabilities that are not part of our cash flow hedging program. ​Forward points are a concern since i) they work against us and ii) they may introduce volatility if the hedge is not valued at spot while the underlying exposure is. Any insight…
Cash & Working CapitalCOVID-19Risk Management
November 5, 2020

Policies Resembling Guardrails That Withstand Trigger Events

Key takeaways from the Assistant Treasurers’ Leadership Group 2020 H2 meeting, sponsored by Chatham Financial.By Joseph NeuPolicy and procedures off the back burner.  The pandemic put a wide range of policy and procedure review projects on the back burner and more members are starting to refocus on them now as immediate liquidity concerns recede. A session on risk policy reviews, for instance, highlighted how valuable a review can be after an event trigger from a change in business, such as…
COVID-19Treasury Management
November 3, 2020

No More Offices? Corporates Debate Making Work from Home Permanent

NeuGroup members face a future where some workers may never return to office buildings. NeuGroup members have learned to adapt to working from home (WFH) during the pandemic. Some like it, some don’t. But nine months into Covid, many remain uncertain about what role actual, old-school offices will play moving forward. Several discussed their thinking at a recent meeting of the Assistant Treasurers’ Leadership Group. Two members work for companies that have announced plans to close all office buildings, although many…
Investment ManagementPension and BenefitsRisk Management
November 3, 2020

Walk Before You Run: Using Derivatives in Pension Funds

The value of educating stakeholders on why using derivatives can make sense.During a recent NeuGroup for Pension and Benefits session sponsored by Insight Investment and BNY Mellon, a pair of members shared their knowledge and experience using derivatives in managing corporate pension plans. Two highlights: “Walk before you run” emerged as a key piece of advice to members, most of whom do not make extensive use of derivatives.Educating stakeholders including finance committees, C-Suite executives and accountants on derivatives and their…
ESGPension and BenefitsTalking Shop
November 3, 2020

Talking Shop: How to Respond to a New Rule on ESG Funds in 401(k) Plans?

Context:  On Friday, Oct. 30, the Department of Labor (DOL) issued a final rule clarifying the use by fiduciaries of investments in environmental, social and governance (ESG) funds. The regulation, according to some analysts, will end up limiting the use of ESG funds by some 401(k) and pension plans. Proposed in June, the change was opposed by many asset managers and investment advisors; DOL says the final rule was changed in response to comments. Member question: “Has anyone thought about…
BankingRegionalRisk Management
November 3, 2020

Preparing for More China-US Tension, New Current Account Rules in India

Key takeaways from the Asia Treasurers’ Peer Group fall meetings sponsored by Standard Chartered.By Joseph NeuIndia ties current accounts closer to credit relationships. Members wanted clarity on a Reserve Bank of India (RBI) circular released over the summer that seeks to restrict current accounts to banks with which companies have a local credit relationship—subject to thresholds. Standard Chartered’s presentation explained that going forward, banks cannot open a current account for a customer who has “availed” a cash credit or overdraft…
NeuGroup News
October 29, 2020

The Fastest Growing NeuGroup Continues on Its Upward Trajectory

NeuGroup for Capital Markets recently embarked on its second meeting with discussions on ESG, the debt market, liquidity and more. The fastest-growing NeuGroup ever, the NeuGroup for Capital Markets, had its second-ever meeting via Zoom just over a week ago, with treasury professionals on debt capital markets teams sharing and learning with one another, sponsored by Deutsche Bank. After the first day of meetings, members had time to unwind and bond with one another in a virtual trivia contest, competing as teams…
Capital MarketsInvestment Management
October 29, 2020

Nice Fit: A Matched Portfolio With a Hybrid Management Model

The benefits for one corporate of matching portfolio cash flows to debt payments and using internal and external managers.Matching assets and liabilities, a staple of pension fund managers, is central to how one NeuGroup member runs his technology company’s treasury investment portfolio—or at least a big chunk of it. At a recent NeuGroup meeting, the member explained the benefits of the matched portfolio strategy as well as the advantages of what the company calls a hybrid management model—using internal managers…
BankingCapital Allocation
October 29, 2020

Time for Bonds: A Growth Company Learns the Ropes of Issuing Debt

A debut bond offering reveals the benefits of preparation in working with rating agencies, banks and the C-Suite.Eight years after going public, one NeuGroup member company planned to refinance equity-linked capital with straight debt—in the middle of the pandemic. It successfully completed the issuance, and at a recent NeuGroup meeting the company’s treasurer described a process that was challenging at times but ultimately proved rewarding. Along the way, the treasury team—which had never issued straight bonds—learned valuable lessons, including the need…