Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016 - (Page 45)

CORPORATE FINANCE Increasing corporate repo volumes Many corporate treasurers are choosing Our Global Liquidity Hub as their triparty agent. In 2015 alone, the collateral outstanding of corporate treasurers in the There are several reasons for this sharp increase. First of all, the barriers to entry to the triparty world have been greatly reduced for corporate treasurers thanks to a streamlined set of triparty contracts. In the past, a GMRA was negotiated individually between each pair of counterparties. To simplify this process for corporate treasurers, we offer customers a single legal master agreement across all counterparties, the Clearstream Repurchase Conditions (CRC). This document sets out both triparty provisions and collateral eligibility options and gives treasurers access to all the counterparties within the CRC community. Many corporates in particular now opt for the CRC since their legal departments find it easier to manage. Equities as collateral Another explanation for the increase in collateral outstanding by corporate treasurers is their flexibility in terms of eligibility of asset types as collateral. Banks are subject to stringent regulatory requirements imposing a high quality of collateral which in practice excludes anything except high grade fixed income. Banks could be further squeezed by a potential shortage of high-quality collateral as regulatory requirements for mandatory central clearing of derivatives and more stringent capital ratios are greatly intensifying demand. Since corporate treasuries are not subject to these regulations, they are free to accept high yield fixed income or equities as collateral from banks. This benefits both the banks and the corporate treasuries: corporates make a higher return on the securities collateral than on cash as collateral while banks can improve their balance sheets from a regulatory point of view thanks to term trading opportunities. - APR N°93 Global Liquidity Hub more than doubled, peaking at EUR 25 billion. - It's easy to see why triparty repo is so popular with corporate treasurers these days: Unlike time deposits, triparty repos are backed with specific collateral which secures the re-invested cash. In addition, the collateral is marked to market on a daily basis by a triparty collateral management agent such as Clearstream. In addition to offsetting the potential risk of an insolvency of the repo counterparty, collateral received under a repo is transferred with full title. It is therefore effectively owned by the corporate treasurer pending the closing of the repo (at which point the cash will be simultaneously returned to the treasurer and the collateral to the counterparty). This not only meets the security element that is essential to corporate treasury strategies but also offers genuine liquidity and yield alternatives. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE Corporate treasurers around the world are increasingly using triparty repo as a safe alternative to unsecured cash deposits - they are investing around EUR 25bn daily. Clearstream's Otto Vaisanen, GSF Sales and Relationship Manager for Continental Europe, explains the different options that treasurers have for maximising the use of the assets they receive. / MAY / JUNE 2016 COMPLETE SECURITIES FINANCING SOLUTIONS FOR CORPORATES 45

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW David Blair - How should we set up an efficient KYC Process?
FOCUS
IFRS 9: Hedging - Treasurers will love it
From 17 to 16 reLEASE of the new LEASE accounting standard
Block chain - Is this buzz word turning into a reality?
Bank Single Gateway, the Plumbing of Bank Connectivity
FORUM
Geopolitical threats for the year ahead
Treasurers proceed with caution
Des difficultés en série pour les nouveaux entrants
Easing the Burden - Is a global KYC standard needed?
European trade repository of the year
La dette senior Européenne, un regard nouveau sur l'obligataire
CORPORATE FINANCE
Stay connected with cloud treasury technology
From stone age to straight through processing
Differentiators for treasury management systems
Complete securities financing solutions for corporates
A full and balanced "meal" for your retirement?
15 MINUTES WITH FinMetrics
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016