Global Treasury intelligence
The increase in use of equity funding, the complexity of transfer pricing discussions and using house banks for long term funding are some of the topics covered in this report which explores the different approaches that companies take to funding their subsidiaries and how their processes are evolving.
The report is based on a Treasury Peer Call which took place on 18th March 2021.
The call was expert chaired by Damian Glendinning, whose commentary appears below.
This report was produced by Monie Lindsey.
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CHAIR’S COMMENTARY
This call came out of a series of discussions with treasurers: we spend a lot of time worrying about intercompany loans, external funding locally, etc. But a lot of these issues arise as a result of a series of key decisions, which are strategic and often historical: how do we structure our subsidiaries?
This is a complex decision. A non-exhaustive list of considerations includes:
Most of these topics came up in the call. As always, there are a variety of approaches, with no one right (or wrong!) answer. But some shifts seem to be under way:
Bottom line: it can be worth taking some time to stand back to look at the overall structure, and ask “What would I do if I started from a clean piece of paper?” We never start from a clean piece of paper, but it is good to have a view of what the preferred structure would be, and work towards it.
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