COVID-19Investment ManagementRisk Management
June 16, 2020

A “Perfect Storm” in Emerging Markets Shatters Hope for Some Investors 

Treasury investment managers hear sober forecasts and calls for greater action by the IMF.Hardly any of the treasury investment managers who met in early May at a NeuGroup virtual meeting said they owned emerging market (EM) debt—not very surprising given that most companies have been parking cash in high-quality, short-duration investments since the pandemic rattled credit markets. But one manager who does invest in USD-denominated EM debt said he was “bitterly disappointed” in the International Monetary Fund and G7 nations that had…
BankingCOVID-19
June 16, 2020

So far, So Good: US Banking Sector Shows Strength During Pandemic

Banks are as healthy as ever, and  robust investment-grade debt issuance has bolstered the industry’s profitability.The global pandemic has cratered economies and affected businesses the world over. But the US banking system remains healthy because banks are well capitalized, having adhered to rules put in place after the 2008 financial crisis. Equally important: Investment-grade debt issuance by corporates is generating bank profits. That’s some of what members of NeuGroup’s Tech20 Treasurers’ Peer Group heard at a recent meeting from a…
Accounting & DisclosureComplianceCOVID-19Treasury Management
June 4, 2020

Smooth Sailing: One Investment Manager’s Painless Adoption of CECL

Taking a qualitative approach and doing no discounted cash flow calculations produced a calm CECL debut for at least one investment manager.At a recent NeuGroup meeting, the only investment manager whose company adopted the new accounting standard for estimating credit losses in the first quarter described a relatively painless process, giving comfort to some of his peers. The meeting, sponsored by BlackRock, included a presentation by Aladdin on FASB’s current expected credit losses (CECL) methodology. Aladdin offers risk management software…
COVID-19ESGInvestment Management
June 2, 2020

Financing the Fight Against COVID-19: Sustainability Bond Deals

Corporates and banks fuel gains in social and sustainability bond issuance amid the battle against the coronavirus. The coronavirus pandemic may have dampened green bond issuance in the first quarter of 2020, but it has also pushed some corporates to use proceeds from sustainability bond offerings to help fight the virus. Case in point: Pfizer. Heather Lang, executive director of sustainable finance solutions at ESG ratings firm Sustainalytics—which is being acquired by Morningstar—named Pfizer as one of the institutions using proceeds…
Capital MarketsCOVID-19
May 26, 2020

Good Timing: Blowout Bond Deals Before and After the Meltdown

Two debt issues show the benefits of both planning and flexibility when tapping capital markets.Investors clamoring for highly rated corporate bonds before the financial-market meltdown began in late February and again in early May provided opportunities for issuers to do debt deals at very attractive terms under different circumstances. Two members of NeuGroup’s Assistant Treasurers’ Leadership Group discussed with peers the key factors and market dynamics driving their companies’ deals. The similarities. Each company’s offering, one at the start of 2020 and…
Capital MarketsCOVID-19
May 26, 2020

Aligning Investment Strategy With the Shape of the Economic Recovery

Investment managers hear Neuberger Berman’s bull, bear and base case scenarios and the outlook for credit markets.The best path for some fixed-income investors amid the uncertainty created by the pandemic may be to follow the lead of the Federal Reserve and buy assets that the US central bank is buying to keep credit markets liquid. That was among the key takeaways about asset allocation at a NeuGroup virtual meeting of treasury investment managers in late April sponsored by Neuberger Berman.Bull,…
COVID-19Risk Management
May 26, 2020

Risk and the Butterfly Effect on Supply Chains Amid COVID-19 

What small issue now can turn into a larger risk later? And how far away is later? Can a small slipup in the supply chain—such as the inability to get a small part—create a bigger risk down the line? That example of the butterfly effect in action is what one member of NeuGroup’s Corporate Enterprise Risk Management group says he and management have been thinking about lately. The issue, like many things in business these days, is that COVID-19 adds a…
Capital MarketsCash & Working CapitalCOVID-19
May 7, 2020

Pandemic Reveals the Haves and the Have Nots: Asia Report

Examples of the varying effects lockdowns had on businesses, and how they’ve responded. The coronavirus pandemic has provided more proof that crises affect some companies far differently than others. The reasons include what industry a company is in, its business model and how much cash it has on hand—the haves and the have-nots. Perhaps less expected is that business units within the same company may weather a storm better than others. All this and more emerged in discussions among finance…
BankingCash & Working CapitalCOVID-19
May 5, 2020

Seeking Incremental Credit? Refinancing Loans? Expect Hurdles

Insights from U.S. Bank on current market dynamics as corporates shore up their access to credit. Defensive drawdowns of revolving credit lines have subsided and banks are selectively entertaining requests for new, incremental loans as well as refinancings of existing credit lines. But borrowers can expect some hoops, hurdles and different market dynamics. That was among the takeaways from a presentation by U.S. Bank, sponsor of a recent virtual NeuGroup meeting for treasurers of large-cap companies. Here are highlights: Members…
COVID-19Risk Management
May 5, 2020

Aligning on the Meaning of Risk Helps Companies Focus on It

The word risk means different things to different people; how can you agree on the definition across an organization? “What exactly does risk mean to you?” one member asked during a recent virtual meeting of NeuGroup’s Corporate Enterprise Risk Management Group. The question was a bit rhetorical—the member answered it himself by saying risk means different things to different people. There is good risk, bad risk, strategic risk, operational risk and catastrophic risk. This was true, said one member of…