Cash & Working CapitalFXRegional
May 2, 2024

Beyond Bopreal: Argentina’s Long Road To Relaxed Controls

Why some NeuGroup members say they won’t buy Series 3 Bopreal bonds to send dividends out of the country. After four months of auctioning Bopreal bonds that allow importers to pay off cross-border debts, Argentina’s central bank (BCRA) is responding to flagging demand by opening up the bonds to companies seeking to distribute profits or dividends—perhaps as soon as the next auction, May 6. This has been interpreted by some observers as a first step in lifting capital controls that have left multiple billions…
April 17, 2024

Confronting Currency Complexities: A Capability Center in India

Designing a structure to help FX hedging effectiveness, address tax and regulatory issues, and reduce leakage. Establishing centers of excellence or global capabilities centers is one way a growing number of multinational corporations are transforming themselves into more efficient enterprises that tap skilled talent in overseas markets with lower labor costs to perform value-added services. These corporates must make decisions about where to locate the centers, their functional currencies, how to fund them and how they invoice the parent or…
FXRisk ManagementThe NeuGroup Insights Interview
April 17, 2024

Seeing Risk Through an Auditor’s Sharp Lens: Bill Brewer of BMS

Bristol Myers Squibb’s Bill Brewer on what treasury can learn about risk with an auditor’s mindset and perspective.Effective financial risk management is a fundamental component of how treasury delivers value to a business. And treasury’s skills managing risk have been put to the test repeatedly and profoundly in the last few years amid the pandemic, spiking interest rates, bank failures, wars and more. At Bristol Myers Squibb, treasury has risen to the challenge thanks in part to the expertise of a…
April 10, 2024

Optimizing FX Hedging: Leveraging Technology for Cost Reduction

Feeling pressure to cut costs, FX leaders are leveraging tools to determine which currency pairs to hedge and when. Reducing the cost of FX hedging requires a multifaceted approach that integrates technology, data analytics and collaboration across various business functions. With the right strategy and tools, companies can mitigate risks effectively while reducing expenses in an increasingly volatile global marketplace. At last month’s summit meeting of NeuGroup for Foreign Exchange sponsored by Chatham Financial, FX managers emphasized the need for hedge optimization tools…
March 20, 2024

Navigating a Data Maze: Performance Metrics for FX Hedges

NeuGroup members debate the best methods to measure performance of foreign exchange hedges. Amid the surge of finance teams embracing data and analytics to enhance decision-making, FX managers are harnessing data to measure their hedging programs’ abilities to mitigate risk for scores of currencies, identify strategies to manage exposures, and effectively communicate pre- and post-trade results to internal and external stakeholders. At a recent summit meeting for members of NeuGroup for Foreign Exchange sponsored by Chatham Financial, a majority of members identified finding the best…
January 31, 2024

Dollar-Denominated Bonds in Argentina Draw Corporate Interest

USD-denominated Bopreal bonds offer a way for subsidiaries in Argentina to pay debts owed to US-based parents. The Argentine subsidiaries of some NeuGroup member multinationals are buying so-called Bopreal bonds that Argentina started selling late last year to help importers pay off debt—including money subsidiaries owe parent companies. The bonds are providing relief to corporates with cash trapped in a country with strict capital controls, hyperinflation and a heavily devalued currency. Bopreals are dollar-denominated but can be purchased with Argentine pesos at the country’s…
January 24, 2024

Speeding Ahead: How EY Fueled a Six-Month TMS Takeoff

Working with EY, one corporate went from the RFP stage to actively making FX hedge trades in half a year. When one employee responsible for a corporate global order-to-cash process was tasked with upgrading to a new TMS—during a company-wide S/4HANA implementation—she knew she was in for a long and bumpy ride. But with the help of EY, the company was using the TMS for hedging in less than a year, with more functionality still to come. In a recent…
January 17, 2024

How SAP Helped Clean Up a Messy, Fragmented Treasury Landscape

Using SAP’s FX risk solutions across its hedging portfolios is paying off for one company where SAP is the sole ERP. Adopting SAP’s risk management solution to manage FX risk has allowed the treasury team at one NeuGroup member company to reduce manual tasks, use real-time data to increase agility and enhance data analytics, optimize its hedging programs and save money by retiring non-integrated, third-party treasury applications. At a recent meeting of NeuGroup for Foreign Exchange, the company’s senior financial risk…
Capital MarketsFX
January 10, 2024

Designing a Net Investment Hedging Program That Makes Sense

How one NeuGroup member company tackled hedging net investments denominated in foreign currencies.The process of preparing to launch a net investment hedging (NIH) program to manage risk requires assessing necessity and exposure, a determination of hedge accounting capacity, deciding between instrument alternatives, and early, effective communication between treasury, tax, outside auditors and other stakeholders. Those insights emerged from a member presentation at the fall meeting of NeuGroup for Mega-Cap Assistant Treasurers. The NIH process followed by the presenting member’s company may…
November 2, 2023

Currency Headache in Argentina: Chilling Effects of FX Controls

A new regulation makes some blue-chip swaps, used to move trapped cash out of the country, less attractive. In the run-up to Argentina’s Oct. 22 general elections, the government body that regulates markets issued an official bulletin that has effectively limited outflows of Argentine pesos (ARS). In recent NeuGroup meetings, corporates and regional experts said the regulation increased the perceived legal risk of blue-chip swaps, a type of international asset trade where a multinational in Argentina typically uses local currency to buy sovereign…