BankingCapital MarketsSenior Executive
March 16, 2021

No Sale: Convertibles at Great Prices Fail to Impress IG Corporates

Companies rated investment grade expressed reluctance to issue convertible bonds, despite favorable conditions. It can be a nonstarter to raise the topic of convertible bonds with treasurers at investment-grade companies that can already issue debt with very low interest rates and don’t want their stock diluted when investors convert bonds to equity. But many NeuGroup members whose companies have high credit ratings, including some at a recent meeting of NeuGroup for Capital Markets, say all their banks have pitched convertibles.…
March 9, 2021

Green Discount: Treasury Wins With a Sustainability-Linked Revolver

After a corporate successfully launched a sustainability-linked revolver, the treasurer’s phone started ringing.When it came time for one NeuGroup member to renew an existing five-year revolver, he saw an opportunity to improve pricing and generate positive PR by leveraging the ESG goals that the company had recently put in place. The member’s company worked with BNP Paribas and Unicredit to structure a multibillion-dollar sustainability-linked revolver, the first one in its industry sector.“I’ve received a lot of calls from other treasurers…
BankingCapital AllocationCapital Markets
March 2, 2021

A Third Path for Stock Buybacks: Enhanced Open Market Repurchases

Some NeuGroup members have turned to eOMRs to get the flexibility of OMRs and pricing below VWAP, like ASRs.Many NeuGroup members across groups at recent meetings agreed they have enough excess liquidity and trust in market stability to restart share repurchases; but there has been a range of views about how much emphasis to place on the price per share a corporate pays for its own stock. Where companies fall on the spectrum of answers may determine if they opt…
BankingDiversity & InclusionInvestment Management
February 25, 2021

Treasury’s Key Role in ServiceNow’s Commitment to Racial Equity

ServiceNow has turned to RBC to create a $100 million fund to support Black homebuyers and communities.ServiceNow in late January unveiled a $100 million “racial equity fund”—in the form of a separately managed account— that will be managed by RBC Global Asset Management’s impact investing team. In mid-February, during Black History Month, ServiceNow senior treasury director Tim Muindi, who played a leading role in the process, described the project to other NeuGroup members who work at high-growth tech firms. ServiceNow…
BankingESGTalking Shop
February 18, 2021

Talking Shop: Handling Grant and Expense Payments for a Foundation

Member question: “How is your company handling grant and expense payments for its foundation? Is this handled leveraging existing company processes, tools and teams or outsourced to service providers, such as Foundation Source, etc.? “We’ve outgrown the manual check process and need to scale up here and are curious to learn how you manage this.” Peer answer 1: “Our foundation accounts are with our concentration bank and managed by specific individuals in our corporate team. “We have raised the question…
BankingCapital MarketsTalking Shop
February 9, 2021

Talking Shop: How to Set Rates on Intercompany Lending Agreements

Member question: “We are in the process of reevaluating our intercompany (IC) loan rate-setting policy. I’m trying to benchmark to understand how this is managed at other companies. What is your company’s approach to setting rates on any intercompany lending agreements? “I know reference rates are in flux with the Libor transition but I am specifically trying to understand, from a transfer pricing standpoint, if you set rates with a standard mark-up or based on the entity’s creditworthiness similar to a…
February 4, 2021

Cash Pools in Asia for Corporates Trying to Access Funds in China

NeuGroup members describe cash pools designed to overcome obstacles and minimize taxes.Several members of NeuGroup’s Life Sciences Treasury Peer Group have set up cash pools in China relatively recently, a topic they discussed at their fall meeting in 2020 and in follow-up email exchanges with NeuGroup Insights. The pools are generally a means to an end: getting access to the funds in a country where that can be difficult and expensive. Two-way sweep. One member is using what she described…
February 2, 2021

Carbon Credits 101: Introduction to Voluntary Emissions Reduction

BNP Paribas shares a guide for corporates looking into carbon emission markets.A NeuGroup member at a large technology company recently asked peers on an online forum, “Does anyone have experience in purchasing carbon credits in voluntary markets?” For guidance, NeuGroup Insights reached out to BNP Paribas, which has a long-standing presence in this area and is committed to developing origination capabilities in carbon offset markets.The bank shared a presentation to help clients better understand the dynamics of the voluntary emission…
BankingFXRisk Management
February 2, 2021

Under the Hood: How Banks Price FX Swaps With Corporates

Wells Fargo explains credit and capital charges for corporate counterparties on derivative transactions.Corporates that are using or considering using long-dated hedges such as five-year FX forwards or swaps can benefit from understanding the way banks price derivatives using a combination of credit and capital charges. That idea surfaced during a recent meeting sponsored by Wells Fargo for NeuGroup members who manage foreign exchange risk. Credit and capital costs can impact unwinds and restructurings as well as new transactions, Wells Fargo…
January 28, 2021

Unpleasant Surprise Post-Brexit: A New Bank Fee for SEPA Payments

NeuGroup members confront a fee for payments from UK to EU accounts that lands on beneficiaries.Treasurers are still learning the full impact of the UK’s recent Brexit deal, and several who attended a recent NeuGroup European Treasury meeting shared their reaction to a banking fee that took some of them by surprise. Some corporates making SEPA (single euro payments area) payments from accounts in the UK to the EU are now experiencing an additional fee for receipt, as some banks…