Corporates tapping the bond market should expect an in-depth, rigorous look at COVID-19 impacts. Seller beware: Corporates selling bonds to bolster their liquidity this spring should expect a rigorous due diligence experience involving auditors, underwriters, internal counsel and external capital markets lawyers, among others. The once seemingly perfunctory process for investment-grade issuers has become an intensive, multi-day, near round-the-clock affair, as banks and investors scrutinize issuer disclosures about COVID-19’s near- and long-term business impact. Be prepared. Once generic diligence questions…
April 28, 2020
Keeping the Company Strong after the Initial Hit
Companies have survived the early impact of COVID-19; now the focus is keeping the concern going.There is a lot of talk in treasury and risk circles lately about business continuity plans or BCPs. The talk is mainly around whether the plans worked and what lessons have been learned in the latest crisis. But there has not been as much talk about business resiliency, that is, whether the company, now in the throes of major health crisis, can hang in there…
April 28, 2020
Pandemic Lessons Learned by Treasurers in Asia
How finance teams respond to the need for cash depends in part on their ability to tap global cash pools.As the pandemic brought the world to a standstill, the primary concern of many multinational corporations centered on sustaining their operations, assuming no cash inflows for at least 30 days. For almost every company, that requires a lot of cash! That was among the takeaways from member comments at a recent NeuGroup virtual meeting of treasurers in Asia in early April.Cash…
April 28, 2020
Funding Is Top Priority for Treasurers amid Pandemic: Poll
Treasurers have funding on their minds as they deal with COVID-19. BCP and supply chains also a concern.Securing funding is a top priority for corporate treasurers thrust into the role of organizing companies’ financial response amid the COVID-19 pandemic, according to a recent poll by Bloomberg and Greenwich Associates. Following funding, treasurers say their attention is also on business continuity plans and suppliers.Many treasurers have been tasked with making sure key suppliers have the resources to stay in business and…
April 23, 2020
Pandemic Economy: The Ugly, the Bad, and the Good
From a US standpoint, no matter how experts look at it, the pandemic has created an economic nightmare scenario. But in Asia there may be glimmers of hope. The pandemic has ravaged the global economy and as it lingers, offers little hope of a V-shaped recovery when it eases. It is therefore understandable that the economic prognosis, viewed from that trough of despair, looks pretty ugly. However, the perspectives of several CFOs in Asia participating in a NeuGroup virtual meeting,…
Mega-cap treasurers discuss treasury’s role in promoting ESG and the fragmented ratings landscape. COVID-19 has moved the subject of ESG ratings and financing to the back burner for many businesses. One banker speaking at a NeuGroup meeting called ESG “a luxury” that many companies can’t afford now. But the issue is not going away, and the pandemic offers another lens to view how corporations affect the world and society, and how businesses respond to crises and the needs of employees,…
Societe Generale provides perspective on how Moody’s and S&P are approaching COVID-19 effects. Credit analysts are generally taking a “staged approach” to the new coronavirus’ impact on ratings, largely because current circumstances are unprecedented and have created uncharted analytical territory. That was among the key takeaways from a session led by Societe Generale’s Karl Pettersen, head of rating advisory, at a recent meeting of NeuGroup’s AT30 peer group.Each agency, he added, has adopted a slightly different mindset so far in…
April 16, 2020
Preparing for a (Grand?) Reopening
Founder’s Edition, by Joseph Neu How should finance and treasury professionals prepare for an economic reopening following the COVID-19 lockdown? Since March 10, I have attended most of the 40-plus Zoom meetings NeuGroup has held with members. These include virtual peer group meetings, COVID-19 discussions, weekly office hours and interactive sessions devoted to other subjects. Below are some of my takeaways and insights. Forecasting is paramount. The emphasis every company is placing on forecasting began with determining how long they…
Up until about a week ago, companies were so busy handling the immediate issues related to COVID-19, they were putting off thinking of future risks. Enterprise risk management professionals are paid to look into the future and help companies prepare for it. But COVID-19 changed all that. “Too soon,” was the answer from most members of NeuGroup’s ERM peer group two weeks ago when we asked them about post-pandemic planning and their thoughts about the future. One member back then…
US Bank on where credit markets have been, are now, and what (we hope) lies ahead: recovery and relaxation. NeuGroup held a virtual meeting last week where members who work in treasury at major retailers heard a presentation on bond and loan markets from US Bank and discussed other topics of interest during this period of uncertainty, volatility and disruption. Here are some key takeaways as distilled by Joseph Neu, beginning with insights from US Bank. The five R’s of…