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Capital Markets

Capital MarketsRisk ManagementTax
February 9, 2021

Buzzer Beater: A Treasurer’s Last-Second Debt Deal Scores Big Savings

One member cut his company’s tax bill by beating the clock to complete a debt refinancing.  As one NeuGroup member’s fiscal year began to draw to a close, he saw an opportunity to save his company millions of dollars in taxes by completing a debt refinancing deal—but he had to race the clock get it done before the calendar changed. Because of the pandemic’s impact, the company needed to save money, so it was critical that the debt deal go…
Justin Jones
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BankingCapital MarketsTalking Shop
February 9, 2021

Talking Shop: How to Set Rates on Intercompany Lending Agreements

Member question: “We are in the process of reevaluating our intercompany (IC) loan rate-setting policy. I’m trying to benchmark to understand how this is managed at other companies. What is your company’s approach to setting rates on any intercompany lending agreements? “I know reference rates are in flux with the Libor transition but I am specifically trying to understand, from a transfer pricing standpoint, if you set rates with a standard mark-up or based on the entity’s creditworthiness similar to a…
Justin Jones
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BankingCapital MarketsTreasury Management
January 21, 2021

Tear Down, Rebuild: A Treasurer Lays a Foundation for Best Practices

How a newly hired treasurer revamped her company’s capital structure, banking group and her team. Soon after arriving at a fast-growing midsized multinational company, a newly-hired treasurer with extensive experience in loan restructurings and amendments launched a loan compliance cleanup. That was the first step on the path to establishing best practices at a company that had never had a treasurer with experience in treasury. The treasurer described what she did and her thinking at a recent meeting of NeuGroup’s Treasurers’…
Justin Jones
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BankingCapital Markets
January 21, 2021

Borrowing Authority and the Board: How Often Do You Renew?

NeuGroup’s survey results on the frequency of borrowing authority renewals, use of carve-outs for M&A and more.Nearly two-thirds of the treasurers responding to a recent NeuGroup survey renew their borrowing authority with the board on an ad hoc or as-needed basis, while about one-third do it every year. That’s shown in the pie chart on the left, below. But at a follow-up meeting to discuss the results, the general consensus seemed to be that an annual review made the most…
Justin Jones
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BankingCapital MarketsCOVID-19
January 14, 2021

Calmer Seas: Revolvers Recover, Return to Pre-Covid Pricing, Tenor

Upfront fees are higher, but treasurers renewing facilities see reason for optimism; U.S. Bank is also positive.Multiyear tenors for revolving credit facilities are now available to investment-grade (IG) corporate borrowers, according to several NeuGroup members who have been talking to their bankers recently. This week, one treasurer said, “Things have normalized a fair amount for solid credits,” citing a large bank. This member, who was in the process of renewing his company’s revolver last year when Covid hit, is now…
Justin Jones
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Capital MarketsESGRisk Management
January 14, 2021

Green Hedges: What You Need to Know About ESG Derivatives

Standard Chartered explains the potential value of “use of proceeds” and performance-linked ESG derivatives.The flood of money pouring into ESG finance—everything from green bonds to sustainability-linked revolving credit facilities—has washed up on the shores of derivatives markets. At a recent NeuGroup meeting of European treasurers, sponsor Standard Chartered dove beneath the surface to reveal what value ESG derivatives may offer. The bank described two types: “Use of proceeds” ESG derivatives that hedge FX or interest rate risks arising from ESG…
Justin Jones
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Capital MarketsTechnology
January 14, 2021

Fertile Ground: Capital Markets Look Good for Growing Tech Companies

Bank of the West/BNP Paribas sees inviting conditions for young companies raising capital in 2021.Capital markets bounced back strongly in the second half of 2020, with soaring levels of convertible bond deals and a healthy climate for IPOs and high-yield bonds. Favorable conditions will continue to benefit emerging technology companies this year, according to Bank of the West/BNP Paribas, sponsor of the fall meeting of the Tech20 High-Growth Treasurers’ Peer Group. Highlights:Low high-yields. Volatility due to political tensions and a…
Justin Jones
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BankingCapital Markets
January 5, 2021

Banks Craving Yield Hear Case for Lightly Structured Corporate Notes

An option for members of the Bank Treasurers’ Peer Group coping with excess liquidity amid rock-bottom rates.Many members of the Bank Treasurers’ Peer Group (BTPG) find themselves looking to their investment portfolios as they search for yield in a manner that complies with policy risk parameters—a theme heard at other NeuGroup meetings in the second half as interest rates fell. Banks face the added challenge of tepid loan growth amid a surge in deposits driven by a flight to safe…
Justin Jones
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Capital MarketsESGTechnology
December 22, 2020

Best of NeuGroup Insights 2020

2020 was a year to remember—even if it left us with much we would rather forget. Editor’s note: The power to move forward is the best gift any of us will receive this year. In 2021, our team will use that gift to redouble our efforts to bring you valuable insights that help you thrive in an uncertain world. You can read those insights here on our website or by signing up for our email newsletter (click here). This week’s newsletter, our…
Justin Jones
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BankingCapital Markets
December 17, 2020

Wild Rides: Three Treasurers Rise to the 2020 Financing Challenge

Lessons from three companies whose equity, debt and bank credit transactions required flexibility, speed and more.The scramble for liquidity during the pandemic underscored the need for treasury to be prepared—at any point—to snap into action and access capital or credit. And while each company’s circumstances are different, there are some lessons that emerged from this year’s financings that should interest almost any treasury team. At a second-half meeting of NeuGroup’s Life Sciences Treasurers’ Peer Group, three members described funding transactions…
Justin Jones
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