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.

“The complexity of international guarantees no longer prevents them from being processed digitally”, according to Malik Dahmoune, from Finelia

In November, SWIFT will release a new set of trade finance messages to facilitate paperless processing of international guarantees. The challenges for corporates lie in communicating with all their counterparties in a common language, increasing efficiency and, ultimately, having a consolidated view of their liabilities. In this interview, Malik Dahmoune, director of Finelia Trade Finance Software, explains the key points.

Is the Fate of Your ECR Truly Tied to the Fed Funds Rate?

When we think about how bank fees are being treated in the U.S., there is something very unique that, regardless of your company’s size, industry or banking partners, if you operate in this country, your bank fees will inevitably be tied to your operating balances through an earnings credit rate (ECR) mechanism.

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