Background
The Policy and Technical team continues to speak with treasurers to understand what issues they are facing and in 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 held a number of conversations with HM Treasury, the Bank of England, the CBI, the City of London Corporation and UK Finance. Through these forums we have been able to ensure that the views of the treasury community are heard by policymakers through 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 - treasurers.org/hub/technical/covid19
General overview
As businesses continue to open up, treasurers are beginning to focus on their capital structures and the level of debt they carry. This week’s newsletter includes guidance and help for those looking at how the pandemic may have affected their business in the short and long term.
The CCFF scheme
Taken from the Bank of England report, the following table provides some interesting insights (bankofengland.co.uk/markets/bank-of-england-market-operations-guide/results-and-usage-data).
The data shows that only 32% of applicants to the CCFF facility have currently drawn on this facility (down from 34% at 15 July) and whilst the notional sum of drawing capacity has not materially changed, the actual amount currently outstanding has decreased from £18,498m (a 6% change).
Details of current borrowers under the facility can be found at bankofengland.co.uk/-/media/boe/files/markets/covid-corporate-financing-facility/cp-held-by-ccff-by-business.xlsx.
More information on the programme can be found under bankofengland.co.uk/markets/covid-corporate-financing-facility.
If you have questions you’d like raised with the Bank of England, please email technical@treasurers.org
We are starting to hear from firms that have been able to access the CCFF programme; we provide anonymised feedback to the Bank of England. If you’d like to share your experiences, please drop an email to technical@treasurers.org.
Other Schemes
Following recent EU changes in State Aid Law relating to the ‘undertaking in difficulty’ test for businesses, the British Business Bank amended its Coronavirus Business Interruption Loan Scheme. This means that from 30 July 2020, lenders may now be able to offer CBILS to businesses who had previously been unable to access CBILS.
The Bank has also made available details of the other schemes being made available (gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Coronavirus-Business-Interruption-Loan-Scheme ). The tables below show an extract from this and it shows that:
1. The average value of a CLBILS facility has steadily increased to £6.8m (up from £6.6m three weeks ago)
2. The average value of a CBILS facility has increased by £6k to £0.223m over the last three weeks
3. There have been 122 times as many applications for CBILS compared with CLBILS
4. The average value of a Bounce Back Loan has risen to £30,240 from £28,070
Update from the UK regulators
The ONS produces a fortnightly analysis of business responses in a number of key areas. The highlights from the latest report included the following table:
Of businesses who had not stopped trading, the percentage reporting having no or less than six months cash reserves, dropped from 47% two weeks previously and the percentage reporting having more than six months cash reserves fell from 33% previously.
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.
• The European Council reached a deal on a recovery plan for Europe
Engaging with the treasury community
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 Winterton, Naresh Aggarwal or Sarah Boyce will be in touch with you.
If you have found any resources which you feel we should add to our COVID-19 site, please email us with details.
Naresh Aggarwal
