Regional

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…

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…

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…