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How Corporate Finance products and techniques can be used to add value to your tresaury.

	Arranging a syndicated loan - Article The growth of syndicated loans in Europe over the last few years means that many companies now view them as alternatives to a bond issuance programme. This article explains the process of arranging a syndicated loan. It identifies the key decisions a company needs to take when structuring this sort of loan....
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	Syndicated loan documentation - Article Loan Market Association documentation can help banks and borrowers short cut the negotiation process, allowing loans to be arranged more quickly. Companies must also make sure they protect their own interests during the negotiation. Understanding where compromises can be made is an important part of the negotiation process....
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	Structured finance solutions - Article Both bank debt and traditional bond and commercial paper issues are priced according to a company's creditworthiness, often described in a published credit rating. This is good news for the highest rated credits, as they benefit from a low cost of funds, but is not so good for weaker credits who will be charged more. Structured finance techniques allow companies to reduce the cost of funds by us...
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	Leveraged finance - Article This article assesses the nature of leveraged finance and explains how it can be used to fund acquisitions. Corporate treasurers may find themselves on either side of an acquisition. As a purchaser, a treasurer must structure a transaction to ensure the company's objectives can be met. As a seller, a treasurer must understand the potential investors' objectives and details of its funding struct...
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	Management buy-outs - Article When the group promoting the purchase of an entity is its own management, this transaction is known as a management buy-out. In this article, we identify the process of structuring a management buy-out and highlight some of the advantages for the parent companies divesting an entity through an MBO....
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	Project finance - Article This article highlights the main reasons why companies consider arranging project finance. It explains the main cash flows within a basic project finance structure. The difficulty is that no two project finance structures are the same. Companies need to ensure the structure suits their requirements and that their advisors have the skills to help them in the event the scheme fails to work as exp...
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	Leasing structures - Article Companies are under increasing pressure to manage their balance sheets as efficiently as possible. This article looks at how finance and operating leases can help companies obtain the equipment without tying up capital. It also recognises there are cash flow benefits for manufacturing companies, which can use them as a means of financing custom....
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	Sale and leaseback transactions - Article Sale and leaseback transactions allow companies to generate cash from selling existing fixed assets, whilst retaining their use through a subsequent lease. As companies come under increasing pressure to use their capital efficiently, techniques which allow them to do so are attractive. However, treasurers also need to be aware of the sometimes complex tax and accounting treatment of sale and lea...
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	Asset-based lending – Part I - Article Companies are under increasing pressure to manage their assets as efficiently as possible. This article highlights the main reasons why companies consider undertaking asset-based lending. It explains the main options available and the impact such choices can ultimately have in financial terms. Companies also need to be fully aware of the long and short-term implications of such financing....
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	How to arrange an asset-based loan - Article Companies increasingly view asset-based lending as a viable means of raising finance or restructuring debt levels within a company. This article explains how to arrange an asset-based loan by outlining the key stages involved in reaching an agreement. By adopting a well-structured approach, a company can help to ensure it receives the maximum return on assets....
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	The impact of Basel II - Article In this article we look at the revised Basel Capital Accord – commonly referred to as Basel II. We explain the origins of this international capital measurement system, as well as the implications for corporates....
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	Credit rating advisory - Article The importance of credit ratings has increased in recent years. While it is still possible to issue debt without a rating, the options are becoming more and more limited. In particular, smaller or less well known companies will find it difficult to gain access to the capital markets without a rating. At the same time, these companies often do not have the experience of dealing with credit ratin...
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	Bank credit ratings - Article Banks have used internal credit ratings for some time and the process often lacks transparency for corporate customers. Under Basel II bank internal credit ratings may be used for calculating the minimum capital a bank has to allocate against each individual loan. As these minimum capital requirements will be reflected in the margin and credit terms the importance of bank internal ratings is go...
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	Mezzanine Finance - Article Mezzanine finance is an increasingly popular form of debt finance. Here we explain different mezzanine finance structures and their applications. We will consider which type of company this form of finance is best suited to and evaluate the benefits and disadvantages in comparison to other forms of debt finance. ...
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	Transfer pricing - Article More than 60% of international trade is conducted within multinational companies. Transfer pricing, the pricing of these intragroup trades and services, has long been the number one tax issue for multinational companies. This is no surprise given the growing international regulatory framework designed to curb transfer price manipulations that could substantially reduce a country's tax revenue. ...
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	Company pensions - Article The future of company pension schemes is never far from newspaper headlines. The introduction of new regulations governing pensions and a change to the way in which pensions liabilities are accounted for have altered the balance of power between companies and their pension liabilities. This article provides an introductory guide to the issues currently surrounding company pension schemes and how...
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	Valuing and financing acquisitions - Article Following several subdued years, mergers and acquisitions have made a comeback across Europe. In 2005, M&A activity reached the highest level since the dotcom bubble burst five years ago. This trend looks set to continue in 2006. We look at two key areas which affect treasury: the valuation of the target company and the financing of an acquisition....
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	Supplier finance - Article Companies are increasingly focusing on ways to increase efficiency in the financial supply chain. On the one hand, many companies set out to improve their working capital position by extending the payment terms offered to suppliers. On the other, they are often keen to develop stronger relationships with those suppliers. Supplier finance is one method that can be used to try to reconcile these ...
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	Forfaiting - Article The trend for extended payment terms can mean that suppliers have to wait for several months after an order has been shipped before receiving payment. For many suppliers this is simply not feasible, yet if they refuse to accept a customer’s payment terms they may risk losing the business altogether. A popular solution is the raising of finance against the supplier’s accounts receivable, of which...
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	Commercial paper - Article Due to its flexibility, ease of issuance and relatively low cost, commercial paper (CP) has become an increasingly important funding instrument for large investment-grade companies. In recent years, domestic – and in particular Euro – Commercial Paper programmes have developed as an alternative, and often cheaper, source of short-term funding. This article describes the basics of commercial pape...
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	Shareholder value - Article Every for-profit organisation has the objective of generating a consistent, profitable growth and providing its investors with a return. This return should be at least equal to what investors would receive if funds were invested into alternative investments with similar risk features. Management must therefore choose those strategic and investment decisions which increase shareholder returns. S...
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	Equity and debt capital - Article When raising funds, companies have the choice between equity, debt and hybrid capital. Each type of capital has its own characteristics and has different implications for the financial structure of a company. The composition of equity and debt will also have an effect on the weighted average cost of capital....
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	Hybrid securities - Article The issuance of non-traditional hybrid securities has increased significantly in recent years. In part this development is the result of a more favourable treatment of hybrid securities by regulators and rating agencies. Consequently, these instruments can bring a number of advantages compared to traditional debt or equity instruments due to a combination of debt and equity-like characteristics....
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	Credit derivatives - Article Credit derivatives facilitate risk management for banks, insurance companies and corporates and are often used as a means of asset diversification. They also allow financial institutions to detach credit risk from the credit assets they own and thereby separate asset ownership from exposure to the credit risk. This in turn enables the financial institution to reduce their regulatory or economic ...
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	Asset-backed securities - Article Asset-backed securities (ABSs) are instruments that are backed by underlying assets. ABSs offer a unique combination of benefits to issuers and investors. While they enable issuers to securitise otherwise illiquid assets and provide an alternative source of funding, investors are attracted by a high creditworthiness, higher yields compared to securities of similar rating and the opportunity to d...
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	Asset-backed commercial paper - Article Asset-backed commercial paper has been the main driver of the commercial paper market in recent years. The issuance of asset-backed commercial paper in the US has now overtaken the amount of traditional commercial paper outstanding and represents about 55% of the $2 trillion US commercial paper market. European asset-backed CP meanwhile, increased to 35% of the total European CP outstanding in 2...
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	Private placements - Article A private placement of debt securities can secure long-term fixed-rate funding and offers the treasurer an alternative source of funds to bank loans and public bond issues. The issuers of private placements are often attracted by the private nature of the transaction and the ability to access the capital markets without the need for obtaining a credit rating. However, private placements may be s...
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	Islamic Finance - Article Islamic finance has experienced a resurgence since the 1970s. Over the years Islamic financial institutions, and more recently international banks, have developed and issued a wide range of innovative financial products and instruments that are compliant with Islamic law (Shari’ah). The use of these Shari’ah compliant instruments and banking products is not only limited to Muslim states, as they...
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	The pros and cons of going public - Article Most large companies will consider an Initial Public Offering as a natural stage in their development. At the same time, there are a significant number of companies that are not limited in their success by the fact that they remain privately owned. While going public may offer a number of benefits – not least in terms of funding and increased public awareness – not all IPOs are successful. Give...
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	Going public – the preparation - Article When a company has carefully weighed the benefits and disadvantages of going public, and decided to seek a public listing on a stock exchange, it will be necessary to prepare the business for this fundamental change. In the second article of this ‘Going public’ series, we examine the period of preparation before the actual listing process can commence. ...
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	Going public – the listing process - Article When a company has decided to go public, management must familiarise itself with listing requirements, address issues of general suitability for a public listing and decide on the method of flotation. Once a team of advisers has been assembled, the listing process can begin. In this article we examine the main tasks that are involved in the listing process: applying for admission to the stock ex...
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	Carbon offsetting - Article Carbon offsetting is the voluntary mitigation of greenhouse gas emissions. Companies that aim to become carbon neutral will buy carbon credits generated by emissions reducing projects to offset their own emissions. While the voluntary market for carbon credits has grown exponentially, claims of improper or opaque practices in this unregulated market have become more pronounced. In this article we ...
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	How to obtain a credit rating - Article Access to credit is increasingly dependent on the availability of a credit rating. Investors, who are driving the demand for credit ratings, rely strongly on these assessments of credit risk in their investment decisions. Many institutional investors supplement their own credit research with public credit ratings. Credit ratings are also an important element in determining the prices at which deb...
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	Rating agencies – how do they assess your credit rating? - Article A credit rating is a rating agency’s opinion on the willingness and ability of a debt issuer to make full and timely payments of financial obligations. This assessment of credit risk is based not only on the analysis of financial risks, but also on a wide range of other factors, including industry risks, business risks and management skills, which may have an impact on the debt issuer’s ability to...
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	Corporate Finance - Article Financing receivables is an alternative, non-traditional way of raising funds. It offers companies the opportunity to turn receivables into cash and enhance working capital and cash flow. There are several ways of financing receivables including factoring, invoice discounting and receivables securitisation. In this article we look at the benefits and drawbacks of the most commonly used receivab...
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	PIK notes and loans - Article Payment in kind (PIK) instruments can increase debt leverage without using up cash flow as coupon payments are compounded and not paid in cash. During the past five years, PIK notes and loans have predominantly been used by private equity firms to fund dividend recapitalisations and to refinance or partially finance the cost of leveraged buy-outs. The appeal of these high-yield and, for investor...
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Sub-prime crisis: the effect on the debt capital markets

Sub-prime crisis: the effect on the debt capital markets - Article
This month, we examine the crisis that originated in a small segment of the US mortgage market. We review the extent to which it has spread internationally and consider the impact it has had – directly or indire