What’s on International Treasurer’s radar screen.
A number of topics came up in this week’s editorial discussion, ranging from rolling hedges to collateral management services. With regard to rolling hedges, we have planned an article to look at whyt why corporate treasuries continue establishing one-month hedges for exposures that are not expected to convert for two,three, or six months in the future. The short answer is that it’s the way it’s always been done as many existing programs were designed to avoid accrual accounting in favor of cash accounting by having all forward contracts mature at month end. Hedgetracker’s Helen Kane will explain why treasurers should rethink this strategy.
Benchmarking intercompany lending rates is a topic that comes up frequently on in NeuGroup peer discussions. What’s the right rate and with the IRS and other tax authorities gearing up to examine transfer pricing more closely, how should companies prepare? Will more companies see the need to move away from relatively standard LIBOR plus or minus as set spread methods?
Also discussed was continuing our profiles on third-party collateral management offerings. In the September issue of International Treasurer, we profiled Citi’s OpenCollateral product. For many companies, collateral risk management, either by choice or by necessity, is becoming ever more important in a post-Dodd-Frank world. The question is which third-party vendors are best-positioned to can help take the burden off of an already lean treasury and how quickly will demand spread from leading-edge, quality credits, to the mainstream of large corporates.