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.
We have regular calls with the US National Association of Corporate Treasurers and feedback from the latest call with them can be found towards the end of this blog.
A list of useful material from the ACT, the Regulators, the Government and Others can be accessed from the ACT Knowledge Hub.
Thank you to those who completed our survey on initial responses to the COVID-19 crisis. We are analysing the results and will share these with you shortly. Please continue to answer the 3 quick questions in our “temperature check” so that we can share with you the trends week on week.
The CCFF scheme
As the scheme settles down we will include utilisation data from the Bank of England (BoE).
Taken from the BoE report, I thought the following table looked interesting.
The data shows that only 45% of applicants to the CCFF facility have currently drawn on this facility (down from 54% at 29 April).
This supports some of the conversations we’ve had with treasurers who have applied for the facility as a back-up to their existing financing arrangements. We know that some treasurers prefer to access their own private financing arrangements as it offers the flexibility to pay bonuses and dividends without it being seen as taking government money to pay shareholders and senior management.
It also confirms some conversations and our own liquidity survey that suggest that borrowing requirements may peak in a few months’ time once the furloughing has ceased, salary and redundancy costs start to take effect and business restructuring starts in earnest – before any customer receipts start again.
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.
The CBILS scheme
UK Finance has also released figures in relation to CBILS. More granular information can be found here.
Based on their data the following graphs show the approval levels of the scheme.
The average drawdown per successful application remains relatively unchanged at £164,000 with daily averages of £280,000.
Capital Markets Update
An update on market conditions from NatWest can be found here.
Latest feedback from Treasurers
Quotes we have heard from treasurers include:
September will be a key turning point
Although the board has agreed that we should not draw on the RCF this still comes up at every board meeting
Update from the UK regulators
The Bank of England has increased the loan cap under its CLBILS scheme from £50m to £200m but with some new conditions restricting dividends and executive pay
The Bank of England will start naming the companies that use its coronavirus lending facility from June 4
HM Treasury has announced support to businesses through its Trade Credit Insurance guarantee
The Financial Conduct Authority published a statement on business insurance in response to COVID-19, setting out its position for engagement with industry stakeholders. The FCA has invited comments from policyholders and intermediaries on business interruption disputes.
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
Feedback from the US National Association of Corporate Treasurers
I realised we did not have up to date contact details of my relationship team
We’ve held our first ever virtual meeting with our rating agency
The crisis has opened up my eyes to what can be done remotely don’t expect to travel to see my banks anymore
Our travel budget has been removed from the rest of the year
We have raised $2.5bn without physically meeting our banks
ACT Liquidity Survey
Please take a few moments to answer four questions that will help the ACT Policy & Technical team to weekly assess the liquidity landscape. All information is provided in confidence and the anonymised responses will be shared.
View last week's results from our ACT Liquidity survey here.
Engaging with the treasury community
Thank you to those who completed our survey on initial responses to the COVID-19 crisis. We are analysing the results and will share these with you shortly. Please continue to answer the 3 quick questions in our “temperature check” so that we can share with you the trends week on week.
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
