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R3CEV Corda Platform: the blockchain app store
| 04-12-2017 | Carlo de Meijer |
Fundraising
R3 gained momentum when it achieved this record distributed ledger technology funding in its last funding round. This figure that was raised by 40 institutions from more than 15 countries across the world (including names like Barclays, SBI, UBS, Bank of America Merrill Lynch, HSBC, ING, and Wells Fargo), is known as the largest single investment in a blockchain company to date. This is also seen as a signal that R3, with their Corda Platform, is moving in a right direction, according to many in the banking industry. This notwithstanding some of the early members left.
“R3 will use the funding to: [A]ccelerate technology development and expand strategic partnerships for product deployment. The company’s efforts will be focused on Corda, R3’s DLT platform for regulated financial institutions, and its infrastructure network, which will support a vast range of partner-built financial applications that interoperate seamlessly with each other, existing systems and networks.” R3’s press release
New members
Notwithstanding a number of early partners left the R3 consortium including JP Morgan, Goldman Sachs and Santander, it still attracts new members showing their viability in the blockchain arena. Like the Bahrain based Bank ABC (Arab Banking Corporation), Abu Dhabi Global Market and the International Trade and Forfaiting Association (IFTA). The latter will be involved in the various trade finance projects. Recently also the Banco de la Republico Colombia, the Colombian central bank, joined the R3 consortium. The partnership with various central banks is part of R3’s plan to diversify its consortium membership by the addition of financial regulators and government agencies.
Read the full article of our expert Carlo de Meijer on LinkedIn
Carlo de Meijer
Economist and researcher
Debt Compliance – can you make the grade?
| 01-12-2017 | Paul Stheeman |
Depending on the financing method chosen, your company is likely to have debt or some kind of financial obligations to third parties. This can be in the form of loans, bilateral or syndicated, or in the form of a bond issue. In each case, the underlying agreement has to be well-documented and could be very extensive with several hundred pages of legal language which, for a non-lawyer, may be very difficult to understand.
In that documentation there will be clauses stating what the debtor is allowed and not allowed to do. Another important part of the agreement will be around financial covenants. These are usually ratios which the debtor has to regularly fulfil. It is commonly the responsibility of the Treasurer to ensure that the terms of the agreements are adhered to and to report the status of the covenants to the lenders and investors. To be able to do this the Treasurer will have to work closely with the company’s lawyers, the accountants and the Controller. He furthermore has to “educate” key internal stakeholders in the requirements, so that they also are aware of any hurdles which may prohibit them in carrying out their day-to-day business. This whole process is commonly known as debt compliance.
A loan agreement will typically have between one and five financial covenants which need to be tested and reported to the lenders on a quarterly or semi-annual basis. One of many examples of financial covenants is a coverage covenant, which requires the debtor to maintain a minimum level of earnings or cash flow relative to certain expenses, e.g. interest or debt service. Typically, such numbers are prepared in the accounting department, but the Treasurer will have to ensure that these figures are prepared timely and are within the thresholds allowed in the financing agreements. If these criteria are not met, then the debtor will be in breach of the covenant(s) and technically will be in default.
Default can also arise when so-called prohibited transactions are entered into or “basket” limits are overdrawn. In many agreements the debtor is not allowed to enter into any other financial obligation. This may in practice prohibit the debtor in carrying out his normal course of business. For example, he may be required to issue a performance guarantee. This would initially not be allowed under the agreement. Lenders therefore establish baskets with a threshold amount up to which the debtor may have a bank issue a performance guarantee. Again here, it will be the Treasurer’s responsibility to ensure that all such transactions fall within allowed business or baskets.
Being in default due to a breach of a covenant or a basket could mean that the outstanding debt becomes immediately repayable in full. This is usually neither in the interest of the debtor or the lender, so that the lender can apply for a waiver. It will depend on the seriousness of the breach, but these waivers are often agreed to by the lenders. However, there will be a fee which the lender will have to pay for the waiver and this can be quite substantial.
To summarize, debt compliance is a very important part of a Treasurer’s role as the consequences of non-compliance can at best weaken the company’s position towards its lenders and at worst be disastrous as lenders call on outstanding debt to be repaid immediately.
Paul Stheeman
Owner of STS – Stheeman Treasury Solutions GmbH
Extra Voorlichtingsavond PGO Treasury Management & Corporate Finance op 14 december
| 30-11-2017 | Robert Dekker |
Deze extra voorlichtingsavond is bedoeld voor geïnteresseerden die per 1 februari 2018 willen instromen. Gezien het feit dat we vanaf 1 september 2018 de opleiding (in principe) alleen nog in het Engels aanbieden, en we geïnteresseerden in de opleiding nog een allerlaatste kans willen geven het programma in het Nederlands te kunnen volgen, hebben we besloten de mogelijkheid te bieden om per 1 februari 2018 in te stromen. Dat kan, omdat wij de opleiding modulair georganiseerd hebben, hetgeen ons in staat stelt 2 keer per jaar studenten te laten instromen, namelijk per 1 september en per 1 februari.
Wellicht ken je gegadigden in jouw professionele omgeving die geïnteresseerd zijn in deze opleiding. Zij zijn van harte welkom om een indruk van de opleiding te krijgen en kennis te maken met de programmadirectie, docenten en (ex-)studenten.
Programma Extra Voorlichtingsavond 14 december 2017:
18:45 uur Ontvangst in de Agorafoyer
19:00 uur Start voorlichting
20:00 uur Einde
Wij zien ernaar uit je donderdagavond 14 december aanstaande te ontmoeten.
Locatie
Vrije Universiteit Amsterdam, De Boelelaan 1105, Amsterdam
Zaal Agora 5 (hoofdgebouw, 3e etage, A-vleugel)
Aanmelden en informatie
Wij weten graag vooraf op hoeveel mensen we kunnen rekenen. Aanmelden kan door contact op te nemen met:
Nicole Lijs via 020-598 2171 of [email protected].
Robert Dekker – Program director postgraduate program treasury & corporate finance at the VU University
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