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Capital Markets

Capital MarketsInvestment Management
June 16, 2022

Go Short: The Case for Short Duration Credit

One portfolio manager’s investment in ultra-short securities helps shed light on an underrated way to pick up yield. Investment managers prospecting for opportunities to pick up yield as rates rise may find gold in the hills of short duration credit. At a recent meeting of NeuGroup for Cash Investment sponsored by investment management company Lord Abbett, the portfolio manager of a private university with a large endowment shared how he capitalized on rising yields for short-term investments by working with Lord Abbett at the…
Justin Jones
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Capital MarketsRegional
June 2, 2022

The Fed Won’t Derail the Economy, UMB Tells Assistant Treasurers

The bank’s positive forecast addresses concerns about rates, inflation, growth and unknowns ahead. UMB, the regional commercial bank, presented a surprisingly upbeat economic forecast for this year to assistant treasurers in a recent meeting, suggesting less likelihood they will face difficult choices to help guide their companies through a recession or skyrocketing inflation.  “On our side,” said an assistant treasurer attending the meeting of NeuGroup for Large-Cap Assistant Treasurers, “it’s fear of the unknown,” given the Fed failed to foresee the…
Justin Jones
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BankingCapital Markets
May 19, 2022

A Tale of Two Bank Revolvers 

One company has fewer than 10 banks in its revolving credit facility while the other has more than two dozen. How many banks does a corporation need or want in its revolving credit facility? The answer, no surprise, is that it depends on the company, a point driven home at a recent meeting of NeuGroup for Mega-Cap Assistant Treasurers. During the session, two members discussed how they arrived at very different answers based on the particulars of their companies. Less…
Justin Jones
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BankingCapital Markets
May 12, 2022

Why Morgan Stanley Sees US Economy Avoiding Recession

Economist Robert Rosener tells bank treasurers that rising wages supporting consumption and continued capex by corporates should keep GDP growth above trend. Not everyone thinks the Fed will push the US economy into recession as it raises rates to fight inflation. Robert Rosener, senior US economist at Morgan Stanley, recently told members of NeuGroup for Regional Bank Treasurers that the firm sees just a 25% chance of recession over the next year. “Avoiding recession is our base case, but markets…
Justin Jones
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Capital MarketsCash Investments
May 5, 2022

Benchmarking Investment Strategies in a Rising Rate Environment

Higher rates mean higher yields, but 70% of respondents to a recent NeuGroup survey conducted with Clearwater Analytics do not intend to extend duration. Surging inflation, a hawkish Fed and talk of a recession are prompting corporate treasuries to reevaluate their cash investment strategies. However, 70% of respondents to a NeuGroup survey conducted in partnership with Clearwater Analytics, Going Out the Yield Curve: Benchmarking Investment Strategies, report they do not intend to extend duration to take advantage of the uptick…
Justin Jones
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Capital MarketsCash & Working Capital
April 14, 2022

The Beauty of CP Attracts Many—but Not All—Corporates

CP’s flexibility and low cost beckon, but liquidity risk is a key reason one member says his company is avoiding it—for now.What’s not to like about commercial paper (CP)? This popular form of unsecured short-term debt used in the capital structures of many companies for working capital and other purposes gives issuers a relatively inexpensive, cost-efficient source of funding. Members at a recent meeting of NeuGroup for Capital Markets sponsored by Wells Fargo agreed that CP also gives them flexibility, relative…
Justin Jones
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Capital Markets
April 7, 2022

Go Figure: Swapping to Floating Rates as the Fed Hikes May Pay

It may be counterintuitive, but data shows that issuers swapping from fixed to floating as rates start rising can save.Corporates that loaded up on fixed-rate debt during the pandemic but believe that now—as the Fed starts a rate hike cycle—is not the ideal time to swap some of their debt to floating rates may want to think twice. That takeaway emerged in a session of the spring meeting of NeuGroup for Capital Markets sponsored by Wells Fargo that featured present…
Justin Jones
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Capital MarketsD&I
March 31, 2022

NeuGroup’s Strategic Finance Lab Podcast, Episode 2: Women in Finance: An Interview with Subadra Rajappa of Societe Generale

Step into a lab where innovation and digital transformation empower senior finance executives to become true strategic partners. NeuGroup Insights marks the end of Women’s History Month with a look at what needs to happen for more women to stay and advance in careers in finance. In episode No. 2 of NeuGroup’s new podcast exploring the future of finance and the office of the CFO, NeuGroup’s Managing Director for Research and Insight, Nilly Essaides, interviews Subadra Rajappa, managing director and…
Justin Jones
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Capital MarketsD&I
March 17, 2022

Lead by Example: Verizon Spotlights Fees Paid to Diversity Firms

Aggregated data shows which IG bond issuers paid diversity firms the most in dollars and as a percentage of total fees.Verizon treasurer Scott Krohn this week presented data to his peers in NeuGroup for Mega-Cap Treasurers showing the top 20 issuers of investment grade (IG) debt ranked by the fees they paid in 2021 to banks and brokerage firms owned by women, Blacks, Latinos and veterans—so-called diversity and inclusion or D&I firms. Verizon is a recognized leader among corporates that…
Justin Jones
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Capital MarketsD&I
February 24, 2022

Searching for Authenticity: How Corporates Select Diversity Firms

Members compare notes and names as they outline the process for picking minority-owned brokerage firms.Authenticity and shared values are what many corporates prioritize when selecting diversity firms for capital markets transactions. That takeaway emerged at a meeting of the NeuGroup for Diversity and Inclusion working group last month featuring three panelists from different companies. “In identifying firms to work with, the most important aspect to us is the authenticity of the firm,” one panelist said. That means reviewing the diversity of…
Justin Jones
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