AFP Blogs

Does your risk management strategy support your firm’s strategic plan? Here are two opinions:

“Many of my current and former clients do not holistically align all their risk management with their business strategy,” says Dan Perkins, CTP, Senior Vice President, GTreasury. “If a company wants to truly align its risk management with its business strategy the treasurer should either sit on the purchasing/commodity committee, or execute the hedges—or both.”

Jennifer Morrison, CTP, Vice President, Senior Risk Manager, Corporate One Federal Credit Union: “What we have found to be fundamental to our weathering the storm has been, first, our organization’s cultural alignment with our risk management practices. Where there are no risk mitigations available, our Enterprise Wide Risk Management Committee, a committee of the board, is tasked with reviewing the risk assessment, mitigation plans, and accepting the residual risk (or not). This has created a culture that is very risk aware and a culture that then understood the storm that hit our investment portfolio in particular beginning in late 2007.”

Read more in the February issue of Risk, coming soon.

Download the January Risk here.

AFP staff will present a complimentary Webinar on the recertification process for all CTPs and CCMs—Everything You Need to Know About Maintaining your Credential—on March 23 at 3:30pm Eastern. Topics to be discussed include:

• The recertification cycle
• Requirements for renewal
• How to calculate and submit credits earned, and
• How to identify qualifying continuing education activities.

The presentation will be followed by a Q&A segment to answer your questions. Participants also receive a guided tour of the newly re-formatted online credit reporting tool. Register here.

Brad Larson, CTP, VP, Global Treasurer for Claire’s Stores, is profiled in Wall Street Journal’s Financial and Accounting Jobs Now site. Using Industry Associations to Build Your Professional Network features Larson talking about how he leveraged his membership with AFP to build his career. You can visit AFP’s career center here.

Uncertainty, the foe of the finance professional, reared its ugly head this week. With a surprising election event in the Commonwealth of Massachusetts and the Administration’s new strategy for dealing with systemic risk, the financial markets reacted quite significantly.

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As we continue to move forward in the new year, the floodgates of new corporate debt issuance continue to be wide open. After the traditional quiet time of year end, January debt issuance is usually a busy time. But this year looks to be busier than most. In fact, we may be experiencing the busiest January since the late 1990’s.

Why is this occurring? Often the factors that cause this to occur are due to alignment. Issuers have a lot of supply and investors have a lot of demand. But it goes much deeper than that.

After experiencing a once-in-generation credit event and concerns about the global economy heading towards a depression, we find ourselves in a much different place here in 2010.

After the central banks of the world provided massive amounts of liquidity to the world economy and drove interest rates down to levels not seen in 70+ years or more, we are faced with the questions of: How will all this liquidity be removed from the market? When rates start to rise, how high will they go? (more…)

Global Capital Markets

2010 is off to a roaring start in the debt markets. After the traditional quiet period of the last two weeks of the calendar year, the pent-up supply of issuers met-up with the pent-up demand by investors to create a very busy first week of the year/decade.

This week was the busiest week for U.S. corporate bond issuance since last September. There was over $44 billion in bonds issued. This is very similar to the dollar amount issued during the first week of 2009. On Tuesday, we experienced the second busiest day ever, with over $23 billion issued.

Freddie Mac issued $4 billion of a 5-year reference note.

Ford Motor Co. issued $1.25 billion of TALF securities (which a Federal Reserve program). The TALF program is set to expire on March 31 of this year.

For the first time since 2007, companies have issued pay-in-kind (PIK) bonds. PIK bonds are securities that pay interest in additional debt rather than cash. (more…)

Overhauling the financial markets could keep cash yields low for the foreseeable future, according to one observer. “This is already evident in the expected changes in 2a-7 money market regulations suggested by the Investment Company Institute, the President’s Working Group on Financial Markets, and the SEC that would have an impact on the Weighted Average Maturity, liquidity, and credit quality of money market funds,” says Adrian Schultes, CFA, vice president of PIMCO. “The exact role of money market funds and their intermediating role in the daily liquidity of the marketplace are still critical questions that will have to be addressed in the coming months.”

Three PIMCO financial experts will discuss how treasury can invest their corporate cash in a one-hour Webinar on Jan. 14 at 3:30 pm. “Investing your Corporate Cash: Opportunities in the Cash and Short Duration Markets in the New Normal” will feature advice from Paul McCulley, PIMCO’s Managing Director, Generalist Portfolio Manager, as well as EVP Jerome Schneider and SVP Paul Reisz.

The Webinar will focus on:
• the state of the economy and its impact on the cash markets
• the outlook for the markets
• a framework to assess liquidity needs and asset allocation.

This Webinar has been approved for CPE credits. For more information on obtaining CE credits by participating in AFP webinars, please view the re-certification requirements.