Capital MarketsTreasury Management
January 14, 2020

Love It or Hate It, ESG Is a Key Theme for 2020

Founder’s Edition, by Joseph Neu Reasons you can’t afford to leave ESG off your priority list. ESG and related themes of sustainability and green finance are polarizing. Nearly everyone sits on a spectrum where one end thinks it’s all a bunch of hooey and the other argues it’s the key driver of finance for the next decade. Personally, I feel conflicted—one reason ESG didn’t make my initial list of key 2020 issues. Mixed feelings aside, I’m convinced the decade ahead…
Capital AllocationCapital MarketsCash & Working Capital
January 9, 2020

The Art—Not Science—of Matching Capital Allocation to the Situation

Treasurers discuss balancing the need for liquidity with keeping cash levels moderate as business ebbs and flows. Decisions about capital allocation help treasury pave the way for the road ahead and may take on added importance for businesses generating lots of cash—as well as for those whose growth is downshifting. Treasurers at a recent NeuGroup meeting of life sciences companies shared approaches to the challenges of allocating capital during a variety of scenarios and situations. Optimal capital allocation amid uncertainty.…
Accounting & DisclosureBankingCapital MarketsCash & Working CapitalNeuGroup NewsNGITreasury ManagementTreasury Tech
January 7, 2020

Reimagining the Finance Future in 2020

Founder’s Edition, by Joseph Neu Five items for finance leaders to focus on in 2020 and beyond. 2020 is upon us and the year itself has vision and foresight in its name. Accordingly, it affords us all an opportunity to seek clarity on not just what the year will bring but also a view of what’s in store for the new decade. For finance practice leaders, I see five issues to focus on starting this year and for the coming…
Capital MarketsUncategorized
December 19, 2019

Deutsche Bank: Floating-Rate Debt’s Historical Attractiveness vs. Fixed Is Falling

A falling term premium suggests fixed-rate debt is a better bet for issuers; but the evidence is mixed. Backtesting shows that issuing floating-rate debt has been cheaper than fixed-rate for corporates over the long run. But the co-head of Deutsche Bank’s risk management solutions team for North America told treasurers at a recent NeuGroup meeting that floating-rate debt currently does not look nearly as attractive relative to fixed as it once did.  “Whatever you thought about fixed vs floating before,…
Capital MarketsUncategorized
December 12, 2019

Group Therapy for FX Systems Pain: Misery Loves Company

FX managers for the most part like their systems. But there’s always that one thing that creates a headache. Leo Tolstoy famously posited that “All happy families are alike; each unhappy family is unhappy in its own way.” That line from “Anna Karenina” can definitely be applied to treasury practitioners and their systems. In a discussion at a recent NeuGroup meeting jokingly dubbed the systems “misery montage,” three FX managers members shared their biggest pain points, most of which derive from…
Capital MarketsUncategorized
December 5, 2019

No More Libor-SOFR 101, Please! Treasurers Want Implementation Details

Treasurers say they need specifics on market conventions to complete the SOFR risk puzzle. Many treasury teams don’t want any more bank presentations on Libor-SOFR transition timelines or the basics of risk and fallback language—they want details from bankers, regulators and industry groups on various market conventions. These include how exactly SOFR term rates will be calculated in the cash markets, specifics on any compounding methodology, settlement conventions like lookbacks, and the spread adjustment from Libor to SOFR.“We need details about the market…
Capital MarketsInvestment ManagementUncategorized
November 29, 2019

Prepare for a Surging Green Wave of ESG Products

By Joseph Neu BNP Paribas highlights a veritable tsunami of sustainability-linked finance products.   “Treasurers should be preparing for a tsunami of sustainability-linked finance products,” one NeuGroup member treasurer told me recently in response to market events of the last year. To underscore the importance of that notion, Hervé Duteil, chief sustainability officer for BNP Paribas in the Americas, presented his view to NeuGroup’s Tech20 Treasurers’ Peer Group last month. He described three big waves, or “revolutions,” in sustainable finance:…
Capital MarketsRisk Management
November 29, 2019

Concerns About the Transition from Libor to SOFR

(Editor’s Note–published November 29, 2019) Treasurers aren’t too happy about the fallback language for the Libor-to-SOFR switch. Members at a recent NeuGroup meeting used some colorful language in discussing the challenging issue of changing fallback language in contracts that currently use Libor, the benchmark rate that’s scheduled to disappear after 2021. The wording needs to specify what rate will replace Libor when it’s gone, what triggers the switch, and the pricing spread adjustment between Libor and the successor rate to…
Capital MarketsInsights NewsletterUncategorized
November 6, 2019

We’ll Get to Libor Later

By John Hintze Two surveys say nonfinancial firms are falling behind in Libor transition efforts. Nonfinancial companies are taking a passive approach to prepping for the transition away from Libor, relying heavily on their banks and other financial firms to carry most of the burden. According to recent surveys, however, the financial community is lagging. In its recently published “Liboration: A practical way to thrive in transition uncertainty,” Accenture spells out financial services firms’ lackadaisical efforts toward the transition, even…