Chancellor attacks flight to low-tax regimes
Companies hoping to set up operations in low-tax jurisdictions will be subject to more regulation after the Chancellor of the Exchequer introduced measures in his Pre-Budget Report in December to ensure they are engaging in genuine economic activity.
Cheque processing reforms get go-ahead
Improvements to the cheque clearing process have been set in train through initiatives announced by the Payments Systems Task Force.
The £43bn merger of Iberdrola of Spain and Scottish Power has addressed several issues in the pan-European and global mergers and acquisitions boom.
What will be the key trends this year for corporate treasury departments?
Growth in the euro zone has improved, but remains disappointing compared with the US, the UK and the other big players. Future growth forecasts are uncertain due to persistently rigid labour and product markets, weak domestic demand, high unemployment levels and a reliance on net exports, while the appreciation of the euro could add to the pressure.
Justin Besley, Group Treasurer at Compass group, talks to Julia Berris about sailing the Atlantic and why he turned his back on an idyllic lifestyle in the Bahamas.
The pension risk that companies run can often be many times bigger than the foreign exchange and interest rate risks that treasurers have been managing in a systematic way for years. Treasurers need to manage this pension risk in a similar way. However, as ultimate decision making regarding pension investment lies with trustees, treasurers need to balance the needs of the company sponsor with those of the trustees.
The high level of activity in the recruitment market is set to keep going well into 2007. Deborah Thomas looks in detail at what will be driving treasurer recruitment this year.
Congratulations to the winners and highly commended runners-up in the Deals of the Year Awards 2006. In the ninth year of these awards, the quality and quantity of entrants both continue to reach new highs, and the winners can feel justifiably proud that their achievements have been recognised by their treasury peers.
With year-end figures being compiled, it certainly looks like 2006 will match and perhaps beat the extraordinary year of 2005. Indeed, records are set to be broken this year across the board, as has been reflected in all segments of The Treasurer’s Deals of the Year Awards.
The winner of the high-yield bonds award and overall winner of the Deals of the Year Award 2006 is semiconductor company NXP for its €4.53bn equivalent high-yield bond – the largest ever high-yield issue by a European company and the largest ever technology leveraged buy-out in Europe.
Last March Bayer issued the biggest ever mandatory convertible in Europe and the US to help finance its takeover of rival German pharmaceutical company Schering.
Linde opened up the hybrid bond market back in 2003 and this year it impressed the market with another, a dual-currency deal which incorporated the first hybrid Sterling tranche as part of its financing to acquire BOC group.
British Land scooped first prize in this category for its debt restructuring in August that brought together all its outstanding corporate debentures in one transaction and created a new common security pool of £1.8bn of property.
The winning £700m loan was part of a wider financial reorganisation that enabled Invensys to present itself as well on its way to investment-grade status.
Croda’s acquisition of Uniqema was seen as a bold move for the Yorkshire-based company and was praised by the judging panel as a good example of an exceptionally well-executed, smooth-running deal.
Arsenal FC succeeded in the sale of £260m secured longdated bonds to refinance the shorter-term construction loans used to fund its new Emirates stadium, which was completed in time for the start of the 2006/07 season.
On 7 September 2006 the front page of the Financial Times ran a substantial piece with the headline “GUS in war of words after funds and banks corner debt”. Had it not been competing with the story of a concerted effort by a group of Labour MPs to topple the Prime Minister it might even have been the lead item.
Trends that stand out are an increasing focus by treasurers on higher credit ratings and higher yields, and a growing allocation of cash to bank deposits. The expectation is that cash investment management processes will become ever more automated, while many treasurers also predict an increase in cross-border pooling and more consolidation among providers.
For many years, the Pre-Budget Report (PBR) has been almost as significant as the Budget itself when it comes to announcing tax changes affecting business, and this year’s was no exception regarding the environment. But how green was Gordon’s PBR?
Unsolicited ratings have been a contentious issue for issuers, investors and rating agencies for some time. While the IOSCO code of conduct goes some way to providing a recommended framework for rating agencies, lack of regulation has led many to believe that agencies have too much power in the market.
For treasury to be understood and accepted, communication needs to improve. Better communication leads to better predictions, and this in turn leads to better management of risk and reward.
Chris Bunton, Adrian Buckley and Catherine Adair-Faulkner analyse the examination results of the October 2006 sitting of the MCT, AMCT and ICM examinations. Included is a list of the names of all students who passed.
