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Treasurers reveal real impact of credit crisis

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24th Mar 2009
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The ACT’s Martin O’Donovan reports on the impact of the changed banking and market conditions on the treasury plans of large UK companies, following a series of in-depth interviews with ACT members in FTSE 350 companies.

We are all having to get used to the new way the markets, banks and companies behave and relate with each other. To help you appreciate whether their experiences are unusual or not, the ACT has conducted a series of in-depth interviews with a sample of treasurers and I will flag some of the main findings here.

All recognise that conditions are unquestionably far trickier now, although not everything has ground to a halt – there was even a fair volume of bond issues in January this year.

Many companies took advantage of the benign conditions in 2007 (and earlier) and became overfunded. Some that renewed facilities during the summer 2008 credit crunch sensibly assumed that things would not get better quickly. The vast majority of our respondents will face their first requirement for refinancing in 2011 or later.

Finding a bank prepared to do new business is difficult, and even with the apparently willing ones the approval process within banks is unclear and unpredictable, which can lead to uncertainty, delays and frustration. Relationships are key, and banks are even more conscious of their share of wallet. However, with the right match between bank and customer, deals can be done.

Want to know more? Read the full version of this story on AccountingWEB.co.uk's sister site Finance Week.

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