Weekly roundup 22 July - updates on treasury matters relating to the coronavirus | The Association of Corporate Treasurers

Weekly roundup 22 July - updates on treasury matters relating to the coronavirus

Go back 21 July 2020 Naresh Aggarwal

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.

Please continue to answer the 3 quick questions in our “temperature check” so that we can share with you the trends week on week. View last week's results here.

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 (https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/results-and-usage-data).

The data shows that only 34% of applicants to the CCFF facility have currently drawn on this facility (down from 35% at 24 June) and whilst the notional sum of drawing capacity has decreased from £76,370m (a 0.5% change), the actual amount currently outstanding has increased from £18,596m (a 14% change).

Details of current borrowers under the facility can be found at https://www.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 https://www.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

The Bank has also made available details of the other schemes being made available (https://www.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 £6.6m (up from £6.5m three weeks ago)
  2. The average value of a CBILS facility has increased by £5k to £0.217m over the last three weeks
  3. There have been 132 times as many applications for CBILS compared with CLBILS
  4. The average value of a Bounce Back Loan has fallen to £28,070 from £30,010

 

Update from the UK regulators

  • The Insolvency Services provided its monthly update with the following summary:
    • Overall numbers of company and individual insolvencies remained low in June 2020, when compared with the same month in the previous year. This was likely to be at least partly driven by Government measures put in place in response to the coronavirus (COVID 19) pandemic, including:
      • Reduced operational running of the courts and reduced HMRC enforcement activity since UK lockdown was applied
      • Temporary restrictions on the use of statutory demands and certain winding-up petitions extended to 30 September
    • The exception was, where there was a 33% increase in the average number of IVA registrations in each of the three months ending June 2020, compared with the same period last year. (However, the latest statistics were affected by an artificial increase in registered IVAs in May, as a result of the technical issues experienced by an IVA provider.)
  • The ONS is producing a fortnightly analysis of business responses in a number of key areas. The highlights from the latest report showed that:
    •  Of businesses who had not stopped trading, 47% reported having no or less than six months cash reserves, while 33% reported having more than six months cash reserves.

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 Commission published a set of best practices for the financial sector throughout the pandemic in cooperation with relevant industry stakeholders
  • EC Commissioner for the Economy, Paolo Gentiloni, presented the Summer 2020 Economic Forecast. 

 

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

 

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