marketwatch TECHNICAL UPDATE (TT Mar09 p10-11)

The ACT has been able to report on the impact of the changed banking and market conditions on the treasury plans of large UK companies, following a series of in-depthinterviews with ACT members in FTSE 350 companies.

The Bank of England has published a market notice detailing how it intends to operate its £50bn asset purchase facility to channel state funds directly to the corporate sector. The idea is that it will also underpin secondary market activity,reduce the liquidity premium on high-quality corporate bonds and so remove obstacles to corporate access to capital markets.

Indexation to count as a cash outflow. The true cash cost of debt linked to the Retail Price Index (RPI) is the subject of new ratings criteria from Standard & Poor’s, issued on 10 February 2009.