Farewell 2020: a look back at our best articles
As we bid farewell to what was a year like no other, we look back at some of our articles from last year that provided our innovative points of view on matters related to finance and treasury.
The NEU CP market: the place to be, but what’s the best way to access it?
If you use the NEU CP market, you can stop drawing on your bank lines, keep them as backstop lines, and issue commercial paper at a zero or even a negative rate and at very low cost in terms of legal documentation, writes Muriel Nahmias, senior director at Redbridge.
Factoring: a market driven by deconsolidation / “true sales” transactions of trade receivables
Biggest companies using deconsolidation transactions under established and recurring factoring programs or end-of-year or half-year “spot” transactions earn an average of at least 0.3x leverage, according to our experts Hugo Thomas and Olivier Talvard.
COVID-19 Impact Report | Priority to reinforcing liquidity
Redbridge’s annual study of corporate debt structure reveals that the credit profile of France’s leading listed companies has moved from “A” to “BBB” over the past 18 months. Tensions in negotiations with banks and private bond holders are prompting finance departments to prepare for a more stressful environment.
Commodity Trade Finance between fraud, pandemic and digitization
The recent much publicised cases of fraud and losses in various trading companies in Asia and MENA (e.g. Hin Leong, Agritrade, Phoenix, Hontop Energy and Zenrock) have left a deep mark on the industry. The “usual suspect” group of financing banks (e.g. HSBC, ABN AMRO, Société Générale, Natixis, CACIB, BNP Paribas, ING, MUFG etc.) was seriously impacted with potential losses in some banks going well over USD 100 million. As a direct consequence some leading banks have decided to completely discontinue the coverage of this sector, others have discontinued their activities in certain geographical regions and let their respective teams go. Furthermore, new business has been frozen and thorough reviews are currently being prepared by other leading sector lenders.
Working Capital Management Is Back at the Center of Priorities for Treasury
According to Olivier Talvard, senior director at Redbridge, improving working capital requires careful execution to achieve its goals while simultaneously protecting the client-supplier ecosystem.
Survey – Seven out of ten finance departments to launch cost savings plans
Redbridge’s latest survey of 104 European companies reveals the first lessons of the crisis and the current priorities for treasurers: forecasts, working capital and cash pooling. Any planned savings will need to be mindful of preserving bank relationships.
French National Bank (FNB) manages the Negotiable European Commercial Paper (NEU CP) crisis by listening to its stakeholders.
Florence Saliba, Chairwoman of the French Treasurer Association (AFTE) and François Gouesnard, Vice-Chairman of the Finance Commission, provide a positive assessment on the FNB’s action aimed at restoring confidence in the NEU CP market – Interview
The State’s PRÊT GARANTIE D’ETAT (PGE) is a financing and not an automatic right!
Put in place by the French Government to offer companies easy access to COVID-19 special financial support, the banks are not entirely comfortable with some of the terms and conditions of the measures. They are exercising their normal due diligence, as they would do with any credit applications. Treasury departments should therefore not spend time thinking about the optimal financing structure in the context of more or less rapid economic recovery.
Large caps stay out of the special financing arrangements put in place by governments
Europe’s largest companies are staying away from the special financing arrangements put in place by governments . In France, even before the presentation of the state-guaranteed loan (Prêt Garanti par l’Etat – “PGE”), several large caps had already secured additional liquidity to get them through the first few months of the crisis, such as Airbus, which announced the signing of a €15 billion syndicated loan on 23 March. Other such raising included Schlumberger with a €1.5bn Revolving Credit Facility and Diageo, who launched and priced a USD $2.5bn bond offering.
Renewing Your Credit Facility? COVID-19 Update
The COVID-19 pandemic is forcing companies to explore how they can optimize their bank financing while managing the current uncertain environment.
Commodity Traders – What is the Threshold for Liquidity Source Diversification?
Humanity is shaped by its crisis. So is trading, as old as humanity as well. In order to survive, trading will continuously have to adapt to demand and supply shocks, logistical challenges, increase in risk premia and last but not least liquidity available. In fact liquidity has always been and will continue to be the number one risk consideration for any trading company.
Rating agencies – between speed and precipitation
In the crisis, the credit rating agencies have not all reacted in the same way. An analysis of the three main rating agencies actions since the end of February, shows that Standard & Poor’s (S&P) has been much quicker than Moody’s and Fitch in revising down their views – REPORT