2 min readOver the last year or so the pursuit of yield, for many corporate treasurers, has been rightfully trumped by the objectives of adequate liquidity and capital preservation. This shift in objectives served treasurers well during the deepest of the credit crisis in 2008 as we saw liquidity and capital threatened like no time in recent…
2 min readAs a treasurer or a CFO, what would your reaction be if you were presented with the following description of a cash investment option? It’s a structured fixed income product sold as equity without a stated maturity date. It makes no commitment to daily liquidity, nor does it guarantee principal protection and it pays a…
2 min readExecutive Summary Tip No. 1: In a market that lacks liquidity, CPFF means liquidity. Tip No. 2: When a firm can no longer access CPFF, liquidity may deteriorate rather rapidly. Tip No. 3: Despite the appearance to the contrary, not all CPFF-eligible issuers are the same. Tip No. 4: CPFF eligibility and credit ratings are…
2 min readExecutive Summary The FSP, ARRA, and the flurry of new programs and details in February may not provide the immediate shot in the arm financial markets were looking for, but some of the programs should have substantive, long-lasting positive attributes that could certainly provide a tug in the right direction in the current credit market…
2 min readExecutive Summary As risk averse cash investors slowly move away from an aggressively conservative strategy, we take a look at two developing trends that investors may be considering and some potential pitfalls. Emerging Trends: Bank Deposit Accounts Prime Money Market Funds We think that the credit market has probably exited the free-fall phase and has…
2 min readEmerging signs of stabilization in the credit markets, while a welcome sign, should not result in complacency among corporate cash investors. Risk levels are still elevated in several cash investment sectors and the recent government bailout and restructuring of CitiBank demonstrate that surprises in the banking sector are likely not over. And while Citi’s “too…
2 min readThere’s a very good chance that future generations will look back upon 2008 and remember it as the year of this century’s most alarming financial meltdown, on par with the crash of 1929. With the benefit of hindsight, it’s very likely the Fed action through the end of 2008 will be critically viewed and some…
2 min readExecutive Summary A. Recent market turmoil uncovered rising systemic risks among money market funds: Regulatory rules failed to adequately address investment risks Defending the constant $1 share value became more difficult Money funds as commingled vehicles have inherent drawbacks B. Key factors in money market fund selections: Focus on the wherewithal of the funds’ sponsors…
3 min readRecent credit market events have stress-tested corporate cash portfolios more than at any time I can recall in my 28-year investment career. These events are shocking in scope and have threatened our financial system in ways not seen since the Great Depression. Because it’s so easy to “lose sight of the forest” in this unprecedented…
3 min readIn light of this week’s failed vote on the Troubled Asset Relief Program (TARP), we wanted to share some credit considerations with you. Companies may want to evaluate non-2a-7 bank money market deposit accounts (MMDA’s) with balances greater than $100,000, the FDIC coverage limit per bank (the FDIC insurance limit may increase to $250,000 if…