Trésorier/Treasurer magazine - n°82 - July/Aug./Sept. 2013 - (Page 52)

ONLIN E www VERSION CORPORATE FINANCE Why Cash Credit Research is Important LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE — N°82 — juLy / Aug. / sept. 2013 Research in the cash credit arena is driven by priority: Principal Protection, Liquidity and then yield. The key question that the cash investor should constantly be asking is: will I get my money back? 52 Getting on the List State Street Global Advisors (SSgA) SSgA recognizes the importance of cash credit research as an integral part of successful cash portfolio management. At the heart of the cash credit research philosophy is a fundamental question: how long can we confidently invest in any particular issuer? For example, the cash credit analysts may decide that up to $500 million can be invested in a US bank issue for a period out to 13 months, while $100 million may be invested in another bank, but only for a period of 90 days. So even though the analysts hold different views on the two issues, they are confident the capital will be returned; investment is only made in companies that can withstand market shocks. The analysts meticulously rate companies on their fundamentals in order to create a Credit Approved List. This is a very thorough and disciplined process that requires a formal write-up on every issuer researched. This list is constantly reviewed, challenged and updated, but at all times it is the outcome of scrupulous research. While banks are generally the focus, an evolving credit landscape means other corporate issuers are increasingly on the radar. A skilled credit research capability allows SSgA to cast its net wide to deliver stable sources of yield without compromising principles on capital protection and liquidity. Culture: Smart and Reassuringly Conservative Corporate culture sets the tone for how companies conduct their business and how its people interact with each other and external parties. Our approach to cash portfolio management and cash credit is built on conservative foundations, but it is one we consider to be ‘smart’. Our research process is built to avoid losses, but also to uncover opportunities. In the current low yield environment, the value of ‘smart credit’ is enhanced. Collaborative We place substantial value on having a skilled credit research team that can create approved lists based on analysis and recommendations, free from any bias. A collaborative effort between portfolio management and research is also nurtured, while close client relationships provide a sense of risk appetite and changing priorities. The PMs create portfolios that are guided by credit recommendations and there are regular, formal and informal, discussions on topics like investment size, instrument type and maturity. SSgA has invested heavily over time in its cash management technology platform, allowing all team members to access research, with instant dissemination of notes and changes/setting of limits.

Table des matières de la publication Trésorier/Treasurer magazine - n°82 - July/Aug./Sept. 2013

Couverture
EDITORIAL
SOMMAIRE
FINANCIAL HIGHLIGHTS
INTERVIEW - Mr Jacques Lafitte, AVISA
FOCUS
FORUM OF ADVERTISERS
CORPORATE FINANCE
15 MINUTES WITH - Robert Franck - Directeur associé VISCONTI
NEWS
The Financial Risk Observatory

Trésorier/Treasurer magazine - n°82 - July/Aug./Sept. 2013