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Capital Markets

Capital Markets
June 14, 2023

High Rates Boost Allure of Upgrades to Investment Grade Ratings

Companies on the cusp of IG may want to push for an upgrade and sacrifice some flexibility amid higher interest rates. The surge in interest rates to 15-year highs has treasury teams at companies with credit ratings on the brink of investment grade (IG) grappling with an important decision: Should they push to achieve IG status or maintain the financing flexibility of being just below IG—an easier choice when Fed Funds rates were near 0% vs. 5% today. One treasurer…
Justin Jones
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Capital MarketsRisk Management
April 6, 2023

Volatile Rates Spark Corporate Interest in Pre-Issuance Hedging

Multiple members have executed pre-issuance hedges in recent weeks, with many more strongly considering them. Extreme volatility in interest rates is fueling strong interest in pre-issuance hedging among NeuGroup members who want to mitigate risk—especially those who plan to issue fixed-rate debt in 2023. At the first-half meeting of NeuGroup for Capital Markets sponsored by Chatham Financial and Loop Capital Markets, members and representatives from Chatham agreed that this is an opportune time for companies to consider pre-issuance hedging, particularly using forward-starting swaps.…
Justin Jones
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Capital MarketsDiversity & Inclusion
March 9, 2023

Win-win: Prioritizing D&I Firms for Share Repurchase Programs

Many NeuGroup members say diverse-owned firms excel at open market share repurchases. A long-simmering debate over share repurchases is heating up, generating headlines featuring President Biden and Warren Buffett. But there is no debating that stock buybacks remain a hugely significant tool for corporate capital allocation: they’re projected to exceed $1 trillion in 2023. Bigger insight: Comments about buybacks by NeuGroup members at recent meetings also reveal growing agreement that diverse-owned banks and brokerage firms are distinguishing themselves on share repurchases, providing treasury teams with top-rate…
Justin Jones
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Capital MarketsESG
February 23, 2023

How GM Treasury Drives the Company to a Sustainable Future

GM’s aims for carbon neutrality by 2040 will rely on treasury’s contributions—from acquisitions to green bonds. Treasury at General Motors is playing an active role and working closely with the business as the automaker moves away from producing vehicles with internal combustion engines (ICE) and pushes deeper into manufacturing electric vehicles (EVs). Speaking at the pilot session of NeuGroup for Auto and Transportation, GM assistant treasurer Gustavo Vello described how treasury is helping the automaker achieve its strategic goals. Gustavo…
Justin Jones
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Capital MarketsCash InvestmentsDiversity & InclusionThe NeuGroup Insights Interview
February 23, 2023

Empowering Diversity in Finance: Views From Two Women Bank Execs

Loop Capital’s Sidney Dillard and Sobani Warner of Siebert Williams Shank discuss their careers, working at Black-owned firms, the role of D&I coordinators and more. Many multinational corporations in recent years have increased their commitment to hiring banks, brokerage firms and asset managers that are owned by members of minority groups—so-called diverse-owned firms. NeuGroup is committed to learning and sharing more about these firms, the people who run them and the value they bring to corporates in capital markets transactions…
Justin Jones
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Capital MarketsInvestment Management
February 16, 2023

Strengthening Bonds With Fixed-Income Investors Pays Dividends

A strong commitment to fixed-income investor relations in good times helps one company prepare for rough patches. Say “investor relations” and most people immediately think of equity investors. But not the director of capital markets at a large manufacturer that has more than $100 billion outstanding in unsecured, asset-backed and convertible debt—and who has two team members dedicated solely to fixed-income investor relations (IR). At a fall meeting of NeuGroup for Capital Markets sponsored by Deutsche Bank, the director described his company’s…
Justin Jones
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Capital MarketsD&IInvestment Management
February 2, 2023

Reaching Out: Treasury Leads Engagement With Diverse-owned Firms

NeuGroup research reveals treasury is the primary driver of greater engagement with minority-owned banks, brokers and asset managers.  As chief procurer of financial services, treasury is at the epicenter of a complex ecosystem of financial partners, from banks to brokers to pension and cash investment managers. According to NeuGroup’s D&I Financing and Asset Management Survey, treasury is not only seeking greater engagement with minority-owned firms but is the driving force behind companies’ efforts to build more expansive financial relationships with these…
Justin Jones
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Capital MarketsTechnologyThe NeuGroup Insights Interview
February 2, 2023

Tech in the Spotlight: The Outlook for Financing Growth in 2023

Capital markets insights from Bank of the West Head of Technology Banking Andreas Bubenzer-Paim. If you only read the headlines, you might think that every technology company in the world is cutting jobs. But Andreas Bubenzer-Paim, Managing Director and Head of Technology Banking at Bank of the West, knows that layoffs by giants like Alphabet, Microsoft, IBM and other mega-caps are only part of a tech sector landscape which includes thousands of smaller, high-growth tech firms—many still private—that are actively hiring, not…
Justin Jones
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Capital MarketsLibor SOFR
January 26, 2023

Time Crunch Facing High-yield Loans Without Fallback Language

As Libor cession approaches, borrowers that have yet to seek refis or amendments may face higher execution costs. Libor will cease to exist on June 30, yet many borrowers in the high-yield loan market have yet to amend or refinance their loans to address the need to switch to a different reference rate. Syndicated loans with the Alternative Reference Rates Committee’s recommended replacement (or “hardwired fallback”) language will be automatically converted to the Secured Overnight Financing Rate (SOFR) on June…
Justin Jones
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Capital MarketsTalking Shop
January 19, 2023

Talking Shop: Determining the Interest Rate on Intercompany Loans

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected]. Member Question: “I am exploring whether doing a ‘mini-credit assessment’ (similar to Moody’s model) is a meaningful exercise and a value-add change to our current policy, which is to treat all subsidiaries as created equal for the purposes of determining our credit rating for intercompany loan borrowing rates (i.e., a few notches below…
Justin Jones
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