Weekly roundup - updates on treasury matters relating to the coronavirus


Message from the Chief Executive

These unprecedented times demonstrate quite clearly the importance of the treasurer and their contribution to business and society. Liquidity is the name of the game, and the ACT has been working closely with its members and other stakeholders to support them as much as possible in what is for many an entirely new and very stressful situation. Naresh Aggarwal sets out some of what we have been doing below in his blog, and I’d like just to emphasise that we remain here for you through these difficult times, but our strength lies in our community and the knowledge-sharing we can access. So please do keep us informed of what’s happening in your world, as it’s critical that we represent you fairly and accurately. We see, naturally, some significant differences in impact on your business models, and hence liquidity, and whilst wanting to represent you as a whole we also want to represent those sectors who are struggling more than others – it’s about survival of the whole ecosystem here. I’d also like to thank you for your professionalism and integrity, hard work and commitment, in these difficult times especially, as you keep your businesses in the best financial health possible.

Caroline Stockmann


The Policy and Technical team, along with Caroline Stockmann, has been speaking to a number of treasurers over the last couple of weeks, with more to come, to understand what issues they are facing and what areas the ACT can help. We are also talking with the main banks to understand how they are responding to the COVID-19 crisis. At the same time, we have been in a number of conversations with HM Treasury, the Bank of England, the CBI, the City of London and UK Finance. Through these forums, we have been able to ensure that the views of the treasury community are heard by policymakers from a number of different channels.

A list of useful material from the ACT, the Regulators, the Government and Others can be accessed from the ACT Knowledge Hub.

Feedback from Treasurers thus far

Key messages we have heard include:

  • Announcements by the Bank of England have been welcomed but the devil will be in the detail
  • Concern for the “stranded middle” – companies that have a turnover higher than the £45m CBILS scheme and are unable to access the Bank of England CCFF programme (for a number of reasons, including not being considered as investment grade by a credit rating agency or its equivalent)
  • The banks have been supportive to members drawing down on often infrequently used RCF facilities
  • Some companies have drawn down in their RCF proactively, although this may affect covenants/ratings for other purposes. Others are taking a wait and see approach, depending on how their business performs whether they can first access the new funding schemes on offer from the Government
  • Concern among some treasurers whether their banks may be reluctant to lend if they have already hit limits for a particular sector (eg construction, retailing, etc.)
  • Concern about requirements by some banks for personal guarantees backing loans (though the CBILS clarification that loans <£250k are not requiring such security is welcome)
  • It is also welcome that an external credit rating is no longer a prerequisite to access the Bank of England CCFF facility though there is some concern over how the internal assessments by banks will be shared and used
  • Cash forecasting has moved for many companies from a monthly to a weekly process, supplemented by daily calls to AP and AR teams
  • Difficulty in deciding what scenarios to model – how long should one assume the crisis lasts, what level of decrease in economic activity should be assumed, how can one model impacts in other countries, etc?
  • Regulatory forbearance is really important, and in particular an easing of timelines would be helpful for LIBOR transition – as it stood pre-COVID-19. Timelines are such that it was unlikely Treasury Management Systems would be ready for go-live as the window was simply too tight, and in the current environment a lack of functionality of TMSs would be unthinkable - we are trying to get this message across to the regulators.

Quotes we have heard include:

  • My bank has been proactive in reaching out to me and helping me to understand the Bank of England CCFF programme
  • I wish I had been able to implement my TMS project – it’s too late now
  • Don’t even talk to me about LIBOR reform
  • Working from home with small children and trying to do 18-hour days is not sustainable for me
  • My business is currently valued as the sum of my liquid balances
  • I’ve started a share buy back and cannot stop the programme
  • This has been more catastrophic for my company than the Global Financial Crisis in 2008
  • I have a private placement programme rated as NAIC2. If this can be used, it would save me a lot of time and money
  • I don’t think I need to use the CCFF programme but I’m planning to get the lawyers engaged now – just in case

Views from across the world

As a member of the International Group of Treasury Associations, and the European Association of Corporate Treasurers and working with our colleagues in the US National Association of Corporate Treasurers we are keeping an eye on developments overseas.

Items that caught our eye include:

  • On Friday evening (30/3), the ECB demanded that banks refrain from distributing dividends until 1 October 2020
  • French Finance Minister outlined that all companies that would receive French government support would be prohibited from distributing dividends
  • The Basel Committee has proposed to delay the implementation deadline of the final set of Basel III standards (‘Basel IV’) by one year, to 1 January 2023
  • European Commission issued guidelines on Foreign Direct Investment screening to help protect EU companies from foreign takeovers in the current market context
  • The Federal Reserve re-launched the Money Market Mutual Fund Liquidity Facility (MMLF), which will assist money market funds in meeting demands for redemptions by investors
  • The Federal Reserve launched the Primary Market Corporate Credit Facility (PMCCF) which allows it to lend directly to corporations by buying new bond issuances and providing loans. Borrowers may defer interest and principal payments for at least the first six months so that they have cash to pay employees and suppliers

Clifford Chance has produced a useful guide covering 21 countries.

Engaging with the treasury community

We are running a survey which will take you no more than 10 minutes and will provide the ACT with valuable insights which will be shared with policymakers as well as the broader treasury community. Click here to complete the survey.

We welcome conversations with our members on:

  • How you’re dealing with the crisis
  • What you’d like us to raise with the various bodies we are in regular contact with
  • How the ACT can support you during this challenging time.

Send an email to technical@treasurers.org and either James, Naresh or Sarah will be in touch with you.

Also if you have found any resources which you feel we should include, please email us with details.

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