Risk Management August 20, 2018

Applying a Holistic Approach to Commodity Hedging

Chatham Financial explains holistic hedging amid jump in commodity prices

The price of Brent crude oil jumped more than 70% between June 2017 and June of this year while the price of aluminum climbed from under $1,500 a ton in early 2016 to more than $2,400 a ton in April—an approximately 60% jump—before falling to $2,100 range by mid-August. Then there’s the 10% tariff on aluminum imports imposed by the Trump... Read More

Capital Markets August 17, 2018

Agencies Boost SOFR with Linked Securities

Continuing the push to put Libor out of business, Fannie Mae and the World Bank issue SOFR bonds

With well more than $170 trillion in debt linked to the London Interbank Offered Rate it’s no secret that regulators and investors will face headwinds as they try to disengage from the scandalized reference rate. But advocates for switching from Libor to new risk-free rate (RFR) offerings like the Federal Reserve’s... Read More

Capital Markets August 15, 2018

Corp Debt-to-GDP High but Profits Healthy

Moody’s says corporate debt-to-GDP is at its highest level ever but solid earnings underpin

Corporate debt rose to a record 45.5% of US gross domestic product in Q1 of 2018, according to Moody’s. Meantime the default rate has dropped to 3.4% in June and is expected to drop even lower by 2019. Moody’s says the last time the ratio of corporate debt to GDP was nearly as high today was the second quarter of 2009. And... Read More

Capital Markets August 10, 2018

Pre-Negotiations Shorten Chapter 11 Durations

Fitch says pre-packaged plans make filing easier (but bankruptcy filings are rising)

Companies are spending significantly less time in Chapter 11 bankruptcy, a boon for the ongoing viability of their businesses as well as creditors, but the positive trend is not for every firm. The trend has emerged just as companies’ Chapter 11 filings have jumped. Read More

Accounting & Disclosure August 8, 2018

Readiness Doubts Emerge for New Accounting Standards

Survey: time running out for lease-accounting standard implementation

New lease-accounting standards become effective at the start of 2019, less than five months away, and companies are concerned about being ready in time, according to a survey from Deloitte.
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Treasury & Taxation August 1, 2018

Piloting Pension Moves as Tax Rates Fall, Interest Rates Rise

Most MNCs still have more than a month to contribute to pensions and save on taxes. 

Raytheon last week joined a long list of US multinationals responding to US tax reform by announcing tax-deductible contributions to defined benefit plans.

Capital Markets July 25, 2018

Contract Language for Libor End Falls Short

Fitch says current language in contracts related to syndicated loans is inadequate and could lead to repricing

Despite overall inertia about moving away from the London Interbank Offered Rate, there have been a few proactive organizations who are at least looking to amend the language in the documentation. The problem is, just changing the language may not be enough, according to Fitch Ratings. And unless it’s... Read More