Transitioning from LIBOR: Explaining the cash fallback rates

14-09-2021 | treasuryXL | Refinitiv | Jacob Rank-Broadley

The LIBOR transition: We explain what fallback rates for the USD cash markets are and provide practical insights on how these rates can be used.

  1. Refinitiv USD IBOR Cash Fallbacks are designed to ensure existing USD LIBOR referencing products such as loans, bonds and securitisations can continue to operate post-USD LIBOR cessation.
  2. There are two versions of the Refinitiv USD IBOR Cash Fallbacks: those for consumer products and those for institutional products.
  3. Initially, market participants can use the prototype USD IBOR Cash Fallbacks to become more familiar with the rates and test technical connectivity.

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During my previous blog on fallbacks in April 2021, I outlined the importance of introducing robust fallback rates into the USD cash markets.

There is a substantial exposure of cash instruments that have no effective means to easily transition away from LIBOR upon its cessation. New LIBOR legislation signed into State of New York law reduces the adverse economic outcomes associated with the instruments by requiring them to use the Alternative Reference Rates Committee’s (ARRC) recommended fallback language.

In March, the ARRC announced Refinitiv as publisher of its fallback rates for cash products. Since then, Refinitiv has been working with the Federal Reserve and the ARRC to finalise the design of the USD IBOR Cash Fallbacks.

Refinitiv is committed to supporting you through the LIBOR transition with LIBOR Transition and Replacement Rate solutions

Fallback rate economically equivalent to USD LIBOR

The Refinitiv USD IBOR Cash Fallbacks provide the rates described in the ARRC’s recommended fallback language.

These are composed of two components: the adjusted Secured Overnight Financing Rate (SOFR) part measures the average SOFR rate for the relevant tenor. Added to this is a spread adjustment, which measures the difference between the USD LIBOR for each tenor and SOFR compounded in arrears for that tenor.

Adding these two components together gives an all-in fallback rate that is economically equivalent to USD LIBOR.

There are two version of the Refinitiv USD IBOR Cash Fallbacks: those for consumer products and those for institutional products. Both are published to five decimal places and include the adjusted SOFR rate, the spread adjustment and the all-in rate.

Watch: Refinitiv Perspectives LIVE – The LIBOR Transition: Risk-Free Term Rates

Consumer cash fallbacks

Refinitiv USD IBOR Consumer Cash Fallbacks are designed to ensure existing USD LIBOR referencing consumer cash products such as mortgages and student loans can continue to operate post-USD LIBOR cessation.

These rates are based upon compound SOFR in advance, which means the rate is known at the start of the interest period, plus the spread adjustment.

Prior to 1 July 2023, the spread adjustment will be calculated as the median difference between USD LIBOR and SOFR compound in arrears for the previous 10 working days, resulting in the spread adjustment changing on a daily basis.

This is an indicative rate, and while it should not be used as a reference rate in financial products, it is designed to aid familiarity with the USD IBOR Consumer Cash Fallbacks prior to adoption in July 2023.

Following 30 June 2024, the spread adjustment will be calculated as the median of the historical differences between USD LIBOR for each tenor and the compounded in arrears SOFR for that tenor over a five-year period prior to 5 March 2021.

For the period between 1 July 2023 and 30 June 2024, the spread adjustment will be calculated as the linear interpolation between the two rates outlined above.

A floored version of the consumer cash fallbacks is also available, meaning that if the average SOFR across all days in the tenor is below zero, then the all-in published fallback rate will be solely the corresponding spread adjustment.

Refinitiv USD IBOR Consumer Cash Fallbacks will be published in 1-month, 3-month and 6-month tenors.

Institutional cash fallbacks

Refinitiv USD IBOR Institutional Cash Fallbacks are designed to ensure existing USD LIBOR referencing commercial cash products such as bilateral business loans, floating rate notes, securitisations and syndicated loans can continue to operate post USD LIBOR cessation.

In order to account for different conventions in different markets, there are a number of different versions of the Refinitiv USD IBOR Institutional Cash Fallbacks. There are three different ways of capturing the average SOFR rate: SOFR compound in arrears, Simple SOFR in arrears and SOFR compound in advance.

Added to this is the spread adjustment, which is calculated as the median of the historical differences between USD LIBOR for each tenor and the compounded in arrears SOFR for that tenor over a five-year period prior to 5 March 2021.

Unlike Refinitiv USD IBOR Consumer Cash Fallbacks, there is no transition period. This means that the spread adjustment remains fixed for perpetuity.

Each of the SOFR compound in arrears and Daily Simple SOFR rates will be available in up to seven tenors in a variety of different forms in order to conform to convention in different markets.

The 3-, 5- and 10-day lookback without observation shift versions give counterparties more notice by applying the SOFR rate from three, five and ten business days prior to the rate publication date.

The 2-, 3- and 5-days lookback with an observation shift versions also give counterparties more notice by applying the SOFR rate from two, three and five business days prior to the publication date, but in contrast to a lookback without observation shift, it applies that rate for the number of calendar days associated with the rate two, three and five business days prior.

The 2- and 3-day lockout versions fix the SOFR rate for the last two and three days prior to publication.

The plain version has no lookback, observation shift, or lockout.

The SOFR compound in advance rates for institutional products will be available in 1-month, 3-month and 6-month tenors.

Navigating the LIBOR transition

What’s the next step?

Initially, market participants can use the prototype USD IBOR Cash Fallbacks to become more familiar with the rates and test technical connectivity.

Following the ARRC’s recent endorsement of Term SOFR, Refinitiv plans to supplement the initial prototype with a forward-looking term rate version in due course.

During the prototype phase, we anticipate changes to the methodology based on user feedback to ensure full alignment with industry standards prior to publication of the production rates.

Production rates for the institutional cash fallbacks should be available from autumn 2021, and for the consumer cash fallbacks they will be available from July 2023.

How to access the rates

Prototype rates are now available from the Refinitiv website and through Refinitiv products including Refinitiv® Eikon, Refinitiv Real-Time and Refinitiv® DataScope.

For more information on these rates, including the methodology and identifiers (RICs), please visit our Refinitiv USD IBOR Cash Fallbacks page.

Refinitiv is committed to supporting you through the LIBOR transition with LIBOR Transition and Replacement Rate solutions



Our (interim) treasury labour market is extremely international

$20 Billion in Bank Service Fees: Are You Overpaying?

31-08-2021 | treasuryXL | Gtreasury |

By Heena Ladhani, Ecosystem Manager, GTreasury

Twenty billion dollars. That’s how many corporate treasurers in the U.S. are now forking over to banks in service transaction fees every year. It’s a big number and it’s growing every year. But there’s also vast potential for reducing that amount by optimizing the outlay for-fee services and becoming better-informed for price negotiations.

A recent survey from Treasury Strategies determined that 70 percent of corporate treasurers are reviewing their bank service fees on a monthly basis. However, the same survey determined that a fraction – just 21 percent of treasurers – will actually benchmark those service fees as part of their bank analysis and management. Among those treasurers who do use benchmarks, many only do so on a line-item basis, rather than at the product category level. A majority also don’t have processes to recognize the impact of volume on benchmark prices. In short, there is room – a lot of room – for opportunities to trim costs.

Accurate bank fee analysis backed by correctly applied benchmarking enables treasurers to preserve strong relationships with bank creditors as well. Too often, simplistic benchmark techniques give treasurers only a surface-level analysis of whether fees are in line with market averages. As a result, treasurers may falsely challenge their banks over small sums, while missing out on more appropriate and fruitful interventions – a ‘can’t-see-the-forest-for-the-trees’ scenario. Incomplete analysis comes with its own costs, absorbing misapplied resources and eroding creditors’ goodwill over insignificant or erroneous concerns.

Let’s look at two examples of how benchmarking, done right, can ensure treasurers’ accurate analysis and lead to optimized bank transaction costs:

Example 1: Benchmark beyond what you know

Wire transfer fees are an area in which effective benchmarking is especially ripe for opportunity. For example, suppose a treasurer’s initial internal benchmarking finds that the four banks the company uses offer rates spanning from $14 to $20. This self-benchmarking reveals the potential to move all wire transfer fees to the $14 rate. However, expanding benchmark horizons to the market at large makes clear that all the banks are charging fees well above the median.

There is no shortage of potential reasons for this, which should be investigated. The company could potentially reduce fees by using a bank portal, streamlining Fedwire, SWIFT, or CHIPS costs, opting for digitized communications, and beyond. Importantly, though, a small cost on each wire can quickly add up to significant savings. By benchmarking these fees at a more expansive scope, those savings can be found, pursued, and realized.

Example 2: True treasury management services costs are multi-dimensional

Take a hypothetical corporate treasurer examining lockbox item processing fees at two different banks. Bank X charges $0.30 per item; Bank Y charges $0.50. The treasurer’s organization directs 500 items to Bank X each month, and 5000 to Bank Y. On the surface, the treasurer’s analysis is simple: Bank Y is overly expensive and should be challenged.

A deeper and more holistic analysis, however, clarifies a more accurate picture. Factoring in bundled remittance processing services – such as monthly lockbox maintenance, daily deposit ticket charges, image and hardcopy fees, and courier fees – rewrites the story. Now it’s clear that Bank X provides a per item rate of $4.00, but Bank Y is just $3.00. The more simplistic cost benchmark analysis missed this crucial information.

That said, the analysis must also consider that volume is crucial to accuracy. Bank fees often vary by volume. Checking Bank X’s $4.00 per item rate against the market, the median benchmark price for a volume of 500 items a month is actually $5.00. The bank’s price is quite favorable at that volume. Now looking at Bank Y, the median benchmark price at a volume of 5000 is just $2.00 per item. Suddenly Bank Y is exposed as the truly expensive one.
There is a range of subsequent steps available to leverage this complete analysis into savings. The pricing may simply be too high, or active services may use overly expensive configurations. The treasurer should check for any unneeded services. Common redundancies can include receiving both electronic and hardcopies of checks, using packages featuring both electronic transmission and express mail, performing multiple daily deposits instead of a single batch, or using Fedwire rather than ACH. Accurate benchmarking makes each of these wasteful potential expenses easier to identify. Once recognized, streamlining such service costs can be simple.

When it comes to bank pricing, treasurers also have a variety of options for optimization. For example, treasury could consolidate the lockbox items to Bank Y’s lower cost. It could then restructure processing at that bank to the market’s median price. Alternatively, it could request a bid from Bank Yon on the total volume and explore that offer.

Apply robust benchmark analysis across the board

The same process for optimizing bank offers and options based on complete and accurate benchmark analysis applies to all bank services used by corporate treasury teams. All transaction processing and information services should be put to careful scrutiny to see what savings may emerge. In this way, implementing the right treasury management strategy and processes to make robust benchmarking an integrated component of regular bank fee analysis is an investment that pays equally robust dividends.

Author: Heena Ladhani is the Ecosystem Manager at GTreasury, a treasury and risk management system.  She is a FinTech professional with more than seven years of experience working with global clients to design solutions and improve processes utilizing treasury systems. She resides near Chicago.


How to Start Avoiding Payment Fraud from Happening

| 18-08-2021 | treasuryXL | Nomentia |

It’s 2021 and even with advancing technologies and AI detecting fraudulent behavior, payment fraud remains an ever-present Risk for any company.

The other day we met with someone who has recently been a target of Payment Fraud and is now implementing a payment factory in order to reduce the risk. We wanted to take a look at how we approach the subject with our solution. Having the right software in place is important, sure but it goes beyond technology.

Let’s start with the Software, Nomentia’s Cash Management solution has several mechanisms in place that protect you against fraud.

Here’s a Quick list

  • First of all, our software creates a single point of managing all payments. We talk a lot about centralizing, and this is just that. Our product brings all these payments into a single view. If we think of a typical case, a company might upload some payments to internet banks, some to a service bureau, use host-to-host connections for others and maybe even run some payments via SWIFT. That creates at least 5 times X channels where payments are executed. This means all payments can’t be seen from one view, which already makes it impossible to detect fraudulent or suspicious payments. But in addition, those 5 times X channels also mean 5 times X places where user rights need to be maintained and controlled.
  • This brings us also to the second point; our software comes with a comprehensive user and user rights management. Our software creates a clear structure and visibility as to who has rights to which companies and accounts and what kind of user roles they are having. We create visibility and an easy way to maintain those rights.
  • When payments are transferred from one source system such as ERP, payroll and the likes to our cloud, files cannot be altered. This creates additional security measures that protect companies from attacks.
  • Lastly, we have created capabilities to set up straight forward approval flows that ensure a segregation of duty into the way payments are done, within the users’ approval limit. Approval limits can be set for each user when working in different roles for multiple companies.

Those are the things that come built into our software. But it’s important to highlight one key fact, most fraud attempts have a human factor and that’s why it’s important to look beyond the software and take a critical look at the processes. As a matter of fact, despite all the noise about external risks, fraud and theft are more likely to be committed by an internal actor than an external actor (Source: FBI Internet Crime Complaint Center).

In other words, if you focus on validating data for possible fraud, you probably should take steps to minimize the possibility of fraud in the first place. Otherwise, proverbially speaking, it’s winter (Northern Finland winter for that matter) and you are going out in shorts and with wet hair.

Apart from controlling user access rights, we would like to share some more tips and ideas that can help to mitigate the risk of fraud.

  • Payments that are made from ERP but rejected by the bank cannot be modified by all users. In practice this means when a payment is made from the ERP system but rejected by the bank, it bounces back where users need to review the failed payment, before sending it to the bank. Fixing the payment data on ERP master data instead of manual adjustments. This would highlight and prevent for example internal fraud attempts.
  • Consider working with your system admins to install payment templates that your end users can use. This decreases the risk for fraud and error by limiting the manual work of filling in information.
  • Make use of the full audit trail that we provide. You can see the whole lifecycle of a payment from its creation to its reconciliation, including by whom and which changes were made, who has approved and sent the payment.
  • Create clear rules on manual payment creation. We enforce a 4-eye approval flow before sending it. In manual payments, there might be a reason to have more than 2 persons approval. If you are having SSC’s in use or even multiple SSC globally. Use the standard 4-eye approval flow locally but have additional approval from another SSC to reduce the internal actor.

These are a few ideas from our side. We are always happy to hear more ideas and feedback on how we can together create safe payment processes.




Partner Interview Series: Ramon Helwegen of EcomStream, specialized in optimization of online payment solutions

10-08-2021 | treasuryXL | EcomStream |

treasuryXL are delighted to share the interview with Founder and Managing Director of EcomStream, Ramon Helwegen.

EcomStream is an independent consultancy and is specialized in optimization of online, omnichannel and marketplace payment solutions, and optimization of checkout flows.

Meet Ramon

treasuryXL are delighted to share the interview with Founder and Managing Director of  EcomStream, Ramon Helwegen. Ramon has over 20 years of experience in E-Commerce, Online Payments and IT Managed Services outsourcing at organizations such as: Verizon, GlobalCollect (Ingenico e-payments), EMS (ABN AMRO/Fiserv) and Newgen.

Ramon has then founded EcomStream in 2017. A consultancy specialized in adding value by assessing the client’s checkout and payment solution, to sell more and pay less. For online, omnichannel and marketplace businesses.

International corporates (B2C & B2B) and Twinkle100 is the main target market. Clients include: Bax Music, Kwantum, Leen Bakker, Staples Solutions and vidaXL.

Let’s wait no longer and take the deeper dive with Ramon and his personal story about EcomStream. We asked him 8 interesting questions, let’s go!


1. What is the main goal of EcomStream?

EcomStream has been founded in 2017 and provides optimization services in the field of payment and checkout for online, omnichannel and market places. Both functionally and from a cost perspective. The goal is to provide clients the opportunity to sell more at lower costs.

Many times a client is not fully aware of optimization features that can be provided by their existing providers. This is often low hanging fruit. I also make sure that clients get value for money by benchmarking and renegotiating their rates and fees. Furthermore I’m often asked to optimize the end-to-end checkout flow to make sure the risk of drop offs is reduced to a minimum, and conversion is optimized.

2. Why are clients choosing for your services?

Assurance. Clients never have to worry again about having the best deal and set-up regarding cost and conversion, and often the service is performed on a no-cure no-pay basis.

3. What would be the biggest benefit for clients when working with EcomStream?

The payment market is very dynamic and todays knowledge gets outdated quickly. With EcomStream clients have access to up-to-date knowledge and expertise, just when they need it, and are assured of having the best deal (costs and features) with their providers at all times.

4. What client profile benefits from your services?

Rule of thumb says that most value can be generated for clients in online, omnichannel or market places, who have established mature volumes for a few years already. Clients within the Twinkle250 rankings or large corporates in B2B with direct distribution models would benefit greatly. But frankly, every merchant is very welcome to have a chat to see where I can help.

5. What is the common ground between treasury and EcomStream?

Many of the decision makers that I work with are from treasury departments. However not every treasurer understands payments, fintech, checkout and conversion as much as they would like to. Treasurers are often challenged by other stakeholders in the company to come up with cost savings or additional features, or they are pro-actively looking for opportunities to improve their KPI’s. I’m there to help them and to deliver.

6. What has been your biggest challenge with EcomStream so far?

When managing your own business you don’t have the luxury where you can rely on a large established corporate, with an enormous historical track record, that backs you up. This can be challenging. Especially when getting trust and commitment from the stakeholders and decision makers at a client side, it is your own performance that counts, for each and every project, time and time again.

7. What has been your best experience since the start of EcomStream?

First of all the strength lies within the fact that EcomStream operates an independent business model. I only work for merchants, so there are no projects taken onboard for providers or other parties in the value chain. There is never a conflict of interest but always a full commitment to the merchant.

Furthermore, I’m very pleased that I have received quite some positive work references from clients. Together with an explanation of the merchant business case, these are showing on the website.

8. What will the future hold for EcomStream?

Direct (online) distribution models are getting mainstream more and more. For B2C companies but also for B2B. Often these companies originate from traditional business models and evolve towards digital / omnichannel companies with business challenges they were not aware of before. EcomStream is there for them to unlock opportunities in the field of payment and checkout optimization, so they can sell more at lower costs.

Contact EcomStream directly

Curious to know more? Ramon Helwegen is happy to tell you more about EcomStream and his experience. Contact him directly via [email protected]


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Cloudiness in Libor Transition?

03-08-2021 | treasuryXL | Kyriba | Bob Stark

With less than 6 months to go until the transition from Libor to new overnight risk-free rates, uncertainty lingers as to which rate indices are to be adopted in countries such as the United States.

While regulators remain steadfast in their recommendations that risk free rates such as SOFR in the United States and SONIA in the United Kingdom should be the only choice to replace LIBOR, credit-sensitive rates (CSR) including Bloomberg’s proposed BSBY index remain in the conversation for some market participants and influencers. There are several examples of banks offering new contracts based on the BSBY and other CSRs instead of SONIA, in fact.

Arguments for alternative rates

Proponents of credit-sensitive rates such as Bloomberg’s BSBY, AMX’s Ameribor, and HIS Markit’s CRITS suggest that adopting risk free rates such as Sonia does not solve the underlying transparency issues that plagued Libor in the first place. Bloomberg market experts, such as Umesh Gajria, Global Head of Linked Products, have been referenced arguing that robustness of the highly liquid market instruments supporting their calculated index make BSBY, amongst other proposed indices, resilient to manipulation. Regulators in the UK and US do not agree, stating that the market only needs one replacement for Libor and that replacement must be free of risk and market influence.

Time is running out

Whether SOFR prevails or whether a mix of Libor replacement options remain available to corporate CFOs, with less than 6 months remaining until Libor is discontinued, this rate uncertainty is one of the contributing factors explaining why corporates have yet to transition most of their USD contracts away from Libor. While certain Libor USD tenors will continue to be published into 2023, no new contracts in the United States can be based on Libor effective January 1, 2022. Corporate CFOs are running out of time for a solution to move away from Libor.

Treasury systems support all outcomes

Despite the challenges that corporate treasury teams will continue to experience as they sort out which rates should be used in collaboration with their banks and counterparties, FinTech firms including treasury management systems are prepared for any outcome.

Kyriba offers complete Libor transition support within its cloud solution, including backward-looking compounding calculations, amortizations, and online availability for in-advance and in-arrears risk-free and credit-sensitive rates.

If you have questions or concerns, please reach your dedicated Kyriba representative to setup a consultation with our market teams.

Banks, Fintechs and the Changing Landscape

2-8-2021 | treasuryXL | Pieter de Kiewit

My regular blog readers know I like to take the layman perspective on what amazes me in (Corporate) Treasury. I have my personal archive with relevant news we use to discuss every second week in team meetings. What currently amazes me most are the completely unpredictable developments in what used to be the banking market. Just some recent news:

  • Wise, formerly known as Transferwise does a direct listing in London and is valued at $11 billion. They will invest in further facilitating cross border payments thus offering a bank service substitute; read more
  • The competition of Wise, Revolut receives further investments and is valued at GBP 21 billion. They will establish full banking services building direct competition; read more
  • Mollie, a miniature Adyen, explicitly states that they will beat banks at their game; read more
  • One can also see banks creating their own new brands and services. ABN started Aymz, entering the niche market where RNHB and others are financing real estate in not too big tickets: read more
  • And Niels van Daatselaar, CEO of TreasurUp writes about banks and fintechs working together: read more
  • My final example is Ebury being taken over by Santander: the old world takes over the new contender: read more

A few years ago, the Traditional banks had the upper hand and would buy all parties that threatened them. By now, many Fintechs have a much higher valuation than banks. The extreme liquidity in the markets and willingness to invest leads to a situation that predicting what will be next is hard. I think that future winners find a right balance between applying newest technology, understanding potential clients, choose a clear strategy and move forward at highest speed. Many markets are winner takes all, making the game extra exciting.

I have not found a journalist or researcher who was able to solve this market equation and predict which of the various “eat or being eaten” scenarios will occur. The constant flow of new market entrants will continue. My expectations are that Apple, Microsoft, Google or Amazon entering this market with very substantial investments might be the next game changer. But why would I know?

What do you think will happen?



Pieter de Kiewit

Owner at Treasurer Search




Press release | Kantox joins the treasuryXL community as Premium Partner

28-07-2021 | treasuryXL | Kantox

treasuryXL announces partnership with Kantox to strengthen dissemination of the latest trends about currency management automation technology

VENLO, The Netherlands, July 28, 2021 – treasuryXL, the community platform for everyone who is active in the world of treasury, and Kantox, the global leader in currency management automation software, today announced the signature of a premium partnership.

This partnership will create a new content resource for the treasuryXL community. Treasurers will now have access to a regular stream of insightful and practical content on currency management automation. This partnership includes:

● Collaboration on messaging, content production, and visibility
● Mutual distribution on select items of interest
● Collaboration on larger themes: event promotion, speaking and experts contribution, publications

Through this partnership, treasuryXL and Kantox are striving to ensure that treasurers are always up to date with the latest news and events in their field.

About treasuryXL

treasuryXL started in 2016 as a community platform for everyone who is active in the world of treasury. Their extensive and highly qualified network consists of experienced and aspiring treasurers. treasuryXL keeps their network updated with daily news, events and the latest treasury vacancies.

treasuryXL brings the treasury function to a higher level, both for the inner circle: corporate treasurers, bankers & consultants, as well as others that might benefit: CFO’s, business owners, other people from the CFO Team and educators.

treasuryXL offers:

● professionals the chance to publish their expertise, opinions, success stories, distribute these and stimulate dialogue.
● a labour market platform by creating an overview of vacancies, events and treasury education.
● a variety of consultancy services in collaboration with qualified treasurers.
● a broad network of highly valued partners and experts.

About Kantox

Kantox is a leader in Currency Management Automation software that enables corporates to effectively manage their FX workflow and leverage currencies for growth. Since 2011, Kantox’s expertise and solutions have allowed businesses to collect FX exposure data and automate their hedging, pricing, payment and collection processes.

The company is headquartered in London and authorised by the Financial Conduct Authority (reference number 580343) and Kantox European Union, S.L. is based in Barcelona and authorised by the Bank of Spain (reference number 6890) For more information, visit, @Kantox LinkedIn.



Refinitiv Corporate Treasury Data Insights | July 2021

27-07-2021 | treasuryXL | Refinitiv |

Andrew Hollins, Director of Corporate Treasury Proposition at Refinitiv, brings you the July 2021 round-up of the latest Corporate Treasury Data Insights.

  1. The stability of the dynamic spread between USD LIBOR and its recommended replacement SOFR raises questions about whether corporate treasurers will gain much more benefit from credit sensitive rates over and above SOFR.
  2. Under pressure from inflation, what impact on financial markets could a move in the dollar index bring?
  3. Central banks, including the Bank of England and the European Central Bank, are exploring a central bank digital currency. What benefits would this bring the central banks?

Corporate Treasury Charts of the Month

Sources: USD LIBOR administered by ICE Benchmark Administration; SOFR administered by Federal Reserve Bank of New York

The dynamic spread between USD LIBOR and its recommended replacement SOFR mostly reflects the credit risk of large banks. This spread has remained stable at 13-14bps over the last few years and did not change materially during the COVID-19 related market volatility in H1 2020.

The stability of this spread, particularly during periods of stress, raises questions whether credit sensitive rates such as BSBY and Ameribor provide meaningful benefits over and above SOFR to corporate treasurers.

Tell me more

On 17 March 2021, the Alternative Reference Rates Committee (ARRC) announced it selected Refinitiv to publish its recommended fallback rates for cash products. Following extensive engagement, Refinitiv plans to launch prototype USD fallback rates in August 2021 and production rates in the autumn. Find out more about Refinitiv’s LIBOR Transition and Replacement Rate solutions.

LIBOR Transition Event: why does the USD cash market need fallback rates?

With the major banks expected to stop using USD LIBOR as a reference in the vast majority of new derivatives and cash products by the end of this year, the race is now on for market participants to accelerate their LIBOR transition programmes in order to ensure the ongoing and efficient functioning of financial markets.

In a recent webinar a panel of experts from Refinitiv, the LSTA, Wells Fargo and the U.S. Federal Reserve discuss the USD cash market and the need for fallback rates.

The Big Conversation: The two biggest risks for markets

Inflation may be the headline grabber at the moment, but it is the impact on bond yields and the U.S. dollar that really matter. If they don’t move, markets can tolerate higher inflation.

So far, bond yields have responded well to the inflation scare, but a move in either direction by the dollar could now be a problem. Discover analyst expectations for bond yields and the US dollar and assess the associated market risks.

U.S dollar index. Corporate Treasury Data Insights | July 2021

Data on the Data: the rise of central bank digital currency

Major central banks around the globe have taken steps towards identifying a framework for building a central bank digital currency (CBDC). A CBDC would be a new risk‑free digital form of currency issued by a central bank, which performs all the essential functions of money.

Major central banks around the globe, including the Bank of England and the European Central Bank (ECB), are exploring the common principles and key features for building a CBDC.

In this new episode of Refinitiv’s Data on the Data, Sachin Somani, Global Director of the Central Banking Customer Proposition at Refinitiv, outlines the desire for central banks to develop their own digital currency to complement their existing offerings, reduce the reliance on coins and notes, and compete with private coins in the crypto space.


Watch: The Rise of Central Bank Digital Currency – Data on the Data | Refinitiv

Refinitiv Corporate Treasury Newsbeat

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Impact Funding, Smart way from Investment decision to Funding (Dutch item)

27-07-2021 | Ilfa |

Getting financing is no longer as easy as it once seemed: you went to the bank, your application was approved and you could continue with your business. Now it is a lot more complicated: the banks are reluctant and how are you supposed to know which alternative financing source is right for you and your company? Arnoud Doornbos, Associate Partner of Ilfa, explains that the path from investment decision to successful financing does not have to be difficult, you have to take the right steps.

Je hoort vaak dat het voor mkb-bedrijven moeilijk is om financiering te krijgen. Hoe komt dat?

Het vinden van financiering bij de bank of bij niet-bancaire partijen is altijd een actueel thema. Vaak wordt dit inderdaad als moeilijk ervaren. De oorzaken hiervan liggen de ene keer binnen de mkb-onderneming, bijvoorbeeld omdat het niet financieel niet goed gaat of omdat er geen goede liquiditeitsprognose is, andere keren gaat het om externe factoren, bijvoorbeeld door corona of door de regelgeving van banken, en vaak is het een combinatie.

De terughoudendheid van banken om het mkb op traditionele wijze te financieren is eenvoudig te verklaren: de kosten zijn te hoog. De gemiddelde kostenpost voor een bank met betrekking tot een mkb-krediet bedraagt ongeveer € 5.000,-. Maar ook aan de kant van regelgeving bij banken spelen de ontwikkelingen een rol in het wel of niet willen financieren van het mkb. Als gevolg van de hogere kapitaaleisen voor banken willen zij minder en korter financieren, gaan rentes omhoog en neemt de persoonlijke advisering en ondersteuning van ondernemers af.

Een crisis laat zien dat de bomen niet altijd tot in de hemel groeien. Ondernemen betekent risico lopen en een goede ondernemer anticipeert hierop, heeft inzicht en kan tijdig bijsturen. Zo kun je zorgen dat je interne factoren op orde hebt en voorkomen dat je veel last krijgt van de externe factoren.

Wat zijn naast de terughoudendheid van banken meer recente ontwikkelingen in de financieringsmarkt?

Indien een mkb-ondernemer via de eigen bank op eigen balans een passende financiering kan krijgen, is dit volgens mij de te prefereren oplossing wanneer je kijkt naar de complexiteit en kosten. Mocht deze optie niet afdoende beschikbaar zijn en kan de investering niet uitgesteld worden, dan moet je overwegen om middelen aan te trekken bij niet-bancaire partijen. Dit is niet zo zeer een nieuwe ontwikkeling, tot de vorige eeuw was het zelfs heel gebruikelijk om onderhands leningen te plaatsen bij familie, belanghebbenden of via de beurs. De grote liquiditeit bij banken heeft deze vorm van financieren echter de afgelopen decennia verdrongen.

Door de gewijzigde positie van banken ontstaat er nu opnieuw een rol voor andere partijen in de kapitaalmarkt. Zowel aan de vraag- als aanbodzijde is de markt zichzelf opnieuw aan het uitvinden: grotere transparantie, duurzaam ondernemen, maatschappelijke betrokkenheid en impact en verdere digitalisering moeten een plek krijgen wil men een nieuw publiek kunnen aanspreken. Tegelijkertijd is de wet- en regelgeving in de financiële markt aan het wijzigen. De (Europese) wetgever wil de rechtstreekse toegang van het mkb tot de kapitaalmarkt vereenvoudigen.

Moet je dan kiezen voor een banklening óf een alternatieve lening of is er een tussenvorm?

Je ziet vaak dat ondernemers kiezen voor gestapeld financieren. Dit betekent dat ze naast een bancaire kredietaanvraag ook een beroep doen op andere financieringsinstrumenten, zoals een onderhandse lening, lease, factoring, crowdfunding of de uitgifte van obligaties of aandelen. Gestapeld financieren kan een uitkomst bieden, maar ik vind dat je je altijd moet afvragen hoe je als ondernemer je weg vindt in de snel veranderende kapitaalmarkt. Hoe vind je de juiste bronnen en hou je de kosten van kapitaal in de hand? Volgens mij geeft de Ilfa Roadmap voor funding van ondernemers antwoord op deze vragen.

Wat is dat, de Ilfa Roadmap?

Op basis van onze ervaringen in de financieringsmarkt van de afgelopen 26 jaar hebben wij een stappenplan ontwikkeld. Door de logische opzet, dat wil zeggen het systematisch uiteen trekken van de verschillende stappen in een financiering, en informatie rond nieuwe financieringsbronnen en de regels die daarbij horen, kunnen wij mkb’ers meer inzicht geven in de stappen die genomen moeten worden om tot een succesvolle financiering te komen. Dit kan dus zijn bij de bank, bij een alternatieve bron of via gestapeld financieren.

De Roadmap bestaat uit de volgende stappen:

Ik heb daarbij als doel om de mkb-ondernemer te helpen om zich bewust te worden van keuzes rondom financiering en het formuleren van een eigen beleid daarin. De intentie is om de ondernemer de regie te laten houden over de eigen kredietbehoefte van nu én later. Te afhankelijk worden van een financier is niet in het belang van de ondernemer.

Bij welke soort financieringen kan de Ilfa Roadmap worden ingezet?

Vaak zie je dat het accent ligt op financiering van investeringsbeslissingen, zoals bij vastgoed, inventaris of andere activa, maar bij de Roadmap gaat om de totale financieringsbehoefte, inclusief de financiering van werkkapitaal. We zetten de verschillende stappen, van business case tot en met het beheer van de financiering, systematisch uiteen. Dit betekent overigens niet dat er tussen de stappen geen interactie zit. Soms moet je een of meerdere stappen terugzetten om uiteindelijk verder te komen in het proces. Het steeds toetsen van eerder genomen stappen blijft dus aan de orde. Ik begeleid ondernemers graag in dit proces om samen van investeringsbeslissing naar de uiteindelijke realisatie van de financiering te komen. Bij Ilfa ben ik de laatste tijd regelmatig betrokken bij dit soort trajecten, waar ook een component van (vaak grote) maatschappelijke impact bij zit.

Je noemde maatschappelijke impact eerder ook. Hoe zit het met het rendement van financieringen van ondernemers met maatschappelijke impact?

Een specifieke groep beleggers kan de realisatie van een investering steunen door akkoord te gaan met niet-marktconforme voorwaarden en condities. Het gaat dan vaak om een groep die direct of indirect baat heeft bij het verwezenlijken van de plannen dan wel een groep die vanuit maatschappelijke betrokkenheid wenst dat de plannen gerealiseerd worden. Vaak accepteert men een hoger risico zonder dat hier een corresponderend rendement tegenover staat. Er zijn ook andere opties mogelijk. Hierbij denk ik bijvoorbeeld aan het niet direct betaalbaar stellen van de vergoeding, maar in plaats daarvan het bijschrijven op hoofdsom, hoogte van de vergoeding afhankelijk stellen van de mate van succes van de plannen en/of een (gedeeltelijke) vergoeding in de vorm van een product of een dienst. Verschillende vormen van crowdfunding zijn een goed voorbeeld hiervan. Maatschappelijke vormen van rendement kunnen ook gekoppeld worden aan instrumenten die via de traditionele routes worden aangeboden of verkregen.

Dat klinkt best ingewikkeld!

Dat valt mee, maar financieren is wel echt een vak. De strategie die de organisatie moet formuleren dient aan te sluiten op de mate van risico dat men wenst c.q. kan lopen. Het profiel van de onderneming zal hierin een belangrijk gegeven zijn. Zo zal een starter veel flexibeler willen blijven dan een organisatie die al een tijd staat en goed draait. Ik neem vaak na het profiel het kostenaspect in ogenschouw. Gegeven het gekozen profiel streef ik naar een optimale verhouding tussen risico en kosten en rendement. Mijn motto is dat een goede voorbereiding het allerbelangrijkste is om een financieringsaanvraag succesvol af te ronden. Kort samengevat bestaat een goede voorbereiding uit:

  1. Het business plan
  2. De analyse
  3. De risicoscan
  4. Een antwoord op de vraag: wat voor soort geld heeft de onderneming nodig?
  5. En een antwoord op de vraag: bij wie kan de ondernemer aankloppen voor dit soort krediet en risico?

Als een mkb-ondernemer zich via deze stappen goed voorbereid wordt de juiste financiering bij de juiste aanbieder gevonden. Je voorkomt dat de ondernemer met onvoldoende onderbouwing bij een verkeerd loket aanklopt. Onze aanpak wordt herkent én erkent door de financiële markt.

Het is dus niet heel ingewikkeld als je weet wat je moet doen. Hebben mkb’ers genoeg kennis over financieringen?

Er is een stijgende vraag naar informatie. Als je naar de cijfers kijkt, zie je dat een op de acht ondernemers (13 %) per jaar behoefte heeft aan informatie over financiering. De helft van hen wint deze informatie in bij de bank (51 %) en op internet (46 %). Een derde (30 %) raadpleegt een financieel adviseur, 24 % een accountant en 21 % een boekhouder. Daaruit en uit mijn ervaringen en gesprekken met ondernemers concludeer ik dat bij veel mkb-ondernemer onvoldoende kennis aanwezig is over financieren. Dat hoeft helemaal geen probleem te zijn. De mkb’ers zijn dagelijks bezig met hun bedrijf en hun werkzaamheden. Ik zie voor adviseurs als Ilfa een mooie rol weggelegd. Wij kunnen met onze passie voor financieren ondernemers steunen, zodat zij zich kunnen blijven toeleggen op hun passie: ondernemen.