A quick look at what’s on International Treasurer’s radar screen this week.
A number of topics came out of this week’s International Treasurer editorial meeting. These include getting control of intercompany loans and other resources; how M&A due diligence can be a full-time job; and dashboards for treasury. Also discussed was a profile and update on how FXall is doing under the Thomson Reuters umbrella; also, the current loan market.
Interco loans.
At a recent NeuGroup Engineering & Construction Peer Group Meeting one member described how not-so-great data from the business units prompted look into intercompany capital. This in turn prompted a deeper dive into how the units were using their resources – how they are allocated and how it was paid for. With this in mind, we’ll take a look at how companies are managing the intercompany resources and whether they are doing it efficiently.
M&A due diligence.
Recent members of the NeuGroup universe who have gone through a merger or acquisition have said the due diligence, while very interesting and a great opportunity, can be a great time suck. That is, if you are trying to do this in addition to your regular job as a treasurer, it can be incredibly overwhelming.
Dashboards.
Treasury dashboards can serve multiple purposes. For one it is a great document to show the powers that be what treasury is capable of accomplishing. Two, it can help organize and enhance treasury processes. Therefore, it is critical that the development and rollout of a dashboard be a very positive reflection of the treasury department. Dashboards are typically one- to two-page documents and focus mostly on cash balances, investments, debt and cash flow.
Loan market.
While lending has picked up, it’s still a long way from where it was before the recession. Nowadays, companies are more than willing to lend, however, they’re less interested in lending a very large sums. There was talk of one company needing nearly 4 dozen banks to fill a $4billion credit facility. In any case, the word from one banker at the E&CTPG meeting was “it’s here. It’s cheap. Do it.”
Related to this topic was what foreign banks to strategically include in your credit facility. Many said Chinese banks were a bit too dogged in their documentation and thus, hard to deal with, while some Asia banks, from South East Asia and Taiwan, are more than happy to lend and may present compelling strategic reasons to include.
FXall at Thomson Reuters.
It’s been nearly a year since Thomson Reuters acquired FXall. At the time, International Treasurer wrote that the acquisition accomplished a number of things, in particular that it ups its game (or even overtakes) vs Bloomberg offering; gave FXall needed access to more capital and access to capital from non-banks and finally gave it a shove forward after an IPO failed to excite and thus didn’t provide the capital it needed to pursue its growth strategies and mitigate its regulatory risk (see related story here).
We’ll get an update on how that is going.