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Capital Markets

Capital MarketsTalking Shop
February 24, 2022

Talking Shop: Disclosing Info to Ratings Agencies Before Earnings

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: “Does anyone in the group discuss quarterly earnings with the rating agencies before the press release?”Peer answer 1: “If there is news that we believe they should hear in advance of the earnings announcement, then we do meet with them in advance.”Peer answer 2: “We haven’t been asked to discuss…
Justin Jones
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Capital MarketsPension and Benefits
February 17, 2022

Supreme Court Decision Sparks Fiduciary Concerns for 401(k) Plans

NeuGroup members in charge of DC plans discuss implications for ESG investment options and record-keeping.NeuGroup members who oversee corporate 401(k) plans are weighing the fiduciary implications of a recent Supreme Court ruling in favor of employees of Northwestern University who claimed their defined contribution (DC) plan charged excessive fees and offered confusing investment options. The unanimous decision said a lower court erred in ruling that because Northwestern’s plan included diverse investments, the workers could not sue over fees tied to…
Justin Jones
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Capital MarketsPension and Benefits
January 26, 2022

Bears in Winter: Well-Funded Pension Plans Warm to Hibernation

As more pension plans enjoy surpluses, they consider derisking strategies including hibernation vs. termination.Participants at a recent meeting of NeuGroup for Pensions and Benefits sponsored by Insight Investment voiced concerns about pursuing buyouts of their pension plans by insurers and leaned more toward hibernating plans, although they left room for exceptions. Hibernation occurs with so-called frozen plans that are no longer accruing future benefits and are usually well-funded or overfunded. It involves managing risk to reduce volatility by adopting a…
Justin Jones
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Capital MarketsCompliance
January 26, 2022

SEC Share Repurchase Proposals: Key Takeaways From a Special NeuGroup Session With Sidley Austin

Treasury teams seek guidance on how best to respond to SEC’s buyback disclosure and cooling-off period proposals. In response to requests from several members, NeuGroup recently hosted a special session with partners from the law firm Sidley Austin to discuss proposed rule amendments to SEC Rule 10b5-1 and disclosures about share repurchase plans that the SEC announced in mid-December. The session followed one on the same topic NeuGroup held the week before. Prabhat Mehta and Sonia Gupta Barros, partners in…
Justin Jones
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Capital MarketsCash & Working CapitalCompliance
January 12, 2022

Talk About SEC’s Proposed 30-Day Buyback Cooling-Off Period Heats Up

Members say the proposal for 10b5-1 plans would limit a corporate’s flexibility to execute buybacks efficiently.The SEC’s proposal that corporates wait 30 days after the adoption of a Rule 10b5-1 share repurchase plan before buying back stock would significantly restrict the flexibility of companies to execute the plans effectively. That key takeaway emerged at a session NeuGroup convened this week at the request of treasurers examining the potential implications of several SEC proposals issued Dec. 15 regarding 10b5-1 plans, including…
Justin Jones
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Capital MarketsLibor SOFR
December 15, 2021

Year-End Deadline for New Libor Deals Focuses Minds on Alternatives

Gazing into 2022, SOFR remains the first choice among borrowers, but may still require “mathematical gymnastics.”The year-end deadline for pricing new floating-rate transactions over Libor replacement rates and a steepening but uncertain yield curve prompted assistant treasurers from large-cap companies to tap the insights of rate and hedging experts from Chatham Financial at a recent meeting. Companies are looking to increase their floating-rate exposure compared to a year ago, generally because they are at the higher end of their fixed/floating…
Justin Jones
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Capital MarketsComplianceESG
December 15, 2021

Treasury’s ESG Angst Over Auditors and Credit Rating Agencies

Upper management wants ESG audits to be merged with overall financial audit, to some members’ dismay.Assistant treasurers (ATs) mulling renewals of their companies’ revolving credit lines next year compared notes in a recent meeting session on ESG-related issues, as those factors increasingly play a role in credit decisions—even if it’s unclear precisely how. One concern: There’s a push to merge ESG-related auditing with the overall financial auditing typically done by a Big Four accounting firm, a move the ATs frowned…
Justin Jones
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Capital MarketsCash InvestmentsCompliance
December 8, 2021

Pain You Can Manage and Pain You Can’t: Separately Managed Accounts

SMAs mean accepting KYC and legal dept. pain, but clear communication can save plenty of heartache with managers. Members joined forces for a panel discussion on the pain points associated with setting up, maintaining and reporting for separately managed accounts (SMAs) at a recent meeting of NeuGroup for Cash Investment. Not surprisingly, the most painful parts are the know-your-customer (KYC) obligations and the legal agreement tug-of-war needed for account setup. The encouraging, somewhat unexpected takeaway: Effective communication and a strong relationship…
Justin Jones
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Capital MarketsTreasury Management
December 8, 2021

Trading with Real Money: Good Schooling for Future Finance Talent

Corporates give high marks to a University of Idaho program where students learn real-world lessons by trading.Treasury and finance teams searching for talent with the right stuff—and an edge in this tight labor market—might want to take a page from Starbucks and Micron Technology by strengthening their ties to colleges and universities that are finding innovative ways to teach students financial decision-making skills. Micron treasurer Greg Routin and Melanie Canto, a former Starbucks treasurer who is now a senior business transformation…
Justin Jones
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Capital Markets
December 1, 2021

Using a Framework to Level a Fixed- vs. Floating-Rate Debt Imbalance

The case for having a programmatic, market-agnostic approach to keep floating-rate debt at a desired level.The vast majority (88%) of corporates polled (see below) at a recent NeuGroup for Capital Markets meeting sponsored by Deutsche Bank are above their target percentage of fixed-rate debt relative to floating-rate; but nearly two-thirds (63%) of the companies either don’t plan to make significant changes (42%) to their fixed-to-floating-rate ratio in response to the current market environment, or they aren’t sure about it (21%).…
Justin Jones
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