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 24, 2024

The Big Picture: Why Bank Funding Changes Matter to Corporates

Putting a NeuGroup member question about fed funds credit lines in a broader context for banks and their clients. Corporations have been spending significantly more time and effort monitoring and mitigating bank counterparty credit risk since the collapse of Silicon Valley Bank in 2023. NeuGroup member companies have taken a variety of steps, with some limiting or eliminating their exposure to institutions other than large, global systemically important banks. At the same time, “banks, especially regional banks, are being pushed to reevaluate their funding…
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…
Cash & Working CapitalRegional
March 13, 2024

Trapped Cash Unlocked: Bopreal Pipeline Pays Off for Corporates

Some NeuGroup members are using Argentina’s Bopreal bonds to free nearly all of their trapped cash amid peso devaluation.During continued devaluation of the Argentine peso that may only get worse, multiple NeuGroup members are prioritizing the use of the Bopreal series of bonds launched last December to help importers pay off cross-border debt to get trapped cash out of the country as soon as possible. Members discussed their use of these bonds in a recent session of NeuGroup for Latin America Treasury featuring experts from…
RegionalThe NeuGroup Insights Interview
February 7, 2024

Fitch Economist Olu Sonola Sees Mixed Bag for Corporates in 2024

Companies face cooling inflation but elevated wage growth amid a slowing economy with recession unlikely. In a Strategic Finance Lab podcast you can listen to on Apple and Spotify, Fitch Ratings’ head of US Regional Economics Olu Sonola paints a relatively positive picture of the economic outlook in 2024, thanks in large part to the strength of the US consumer and declining inflation. “The balance sheet of the US consumer is very, very strong,” he tells NeuGroup Peer Group leader Andy Podolsky in the podcast recorded in December 2023…
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…
RegionalTreasury Management
December 7, 2023

Bangalore Bound: Pushing Processes to Centers of Excellence

Treasury at one company is migrating some processes to a COE in India, part of a larger transformation.The increasingly popular move among multinationals to establish a treasury center of excellence (COE) in a low-cost country or region is a multifaceted endeavor that for one NeuGroup member company included thoroughly assessing processes to determine which ones remain in corporate treasury or regional treasury centers, which go to a managed service provider (MSP) and which belong in the COE. Members of NeuGroup for…
Capital MarketsRegionalRisk Management
November 29, 2023

Recession and Rates Rank High on Treasurers’ 2024 Risk Lists

New NeuGroup Peer Research reveals the risk of an economic downturn and high interest expense loom large. As treasurers look ahead to 2024, the results of the NeuGroup 2024 Finance and Treasury Agenda Survey reveal two intertwined risks—headwinds which may also appear at odds with each other—looming on the horizon: the continuing threat of recession, paired with interest rates that may remain higher for longer. Normally, of course, economic weakness brings about lower rates. But the last few years have…
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…
Cash & Working CapitalFXRegional
August 9, 2023

Argentina: Trapped Cash, Election Tea Leaves, Chinese Currency

Dollar-linked investments are one way multinationals are preparing for a possible devaluation of the Argentine peso. Multinational corporations closely watching Argentina’s primary elections on Aug. 13 for a preview of the general presidential election in October face significant uncertainty about the magnitude and timing of a possible devaluation of the Argentine peso. Many are seeking ways to hedge their exposure to the currency as they struggle to get trapped cash out of a country with capital controls, spiraling inflation, taxes on imports and a scarcity…