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Industry roundup: 23 February

DBS provides US$60m structured trade facility to Chandra Asri 

DBS Bank has announced that it has provided a US$60m structured trade facility to PT Chandra Asri Petrochemical Tbk (Chandra Asri), to support the company’s efforts to expand export growth of petrochemical products from Indonesia.

Chandra Asri is the largest integrated petrochemical producer in Indonesia and operates the country’s only Naphtha cracker that produces Olefins (Ethylene, Propylene), Pygas and Mixed C4, as well as Polyolefins (Polyethylene and Polypropylene). Recently, Chandra Asri has brought on stream Indonesia’s pioneering Butene 1 and Methyl Tert-Butyl Ether (MTBE) plants in 2020, notwithstanding the Covid-19 pandemic. This is in line with the company’s plan to vertically integrate, support domestic consumption, and grow its export sales of monomers and polymers from Indonesia to bolster the country’s balance of payments.

DBS has been providing Chandra Asri, its corporate customer since 2005, with a variety of banking services in areas such as: digital banking, cash management, trade facilities, treasury, debt capital markets, and financing, to meet the wide-ranging business needs of the company.

"This uniquely structured trade finance solution gives Chandra Asri the ability to obtain, scale and diversify access to competitive financing," said Tan Su Shan, group head of Institutional Banking at DBS. "We look forward to continue working with the company and to helping more corporates from Indonesia expand and grow internationally." 

While trade facilities are usually straightforward, DBS’ structure for Chandra Asri uniquely integrates a combination of trade products to deliver a customised solution. It meets the trading needs of the company today and provides the flexibility to Chandra Asri to upgrade the facility quickly as their export growth expands in the future. 

 

ARRC releases conventions for SOFR-based intercompany loans 

The Alternative Reference Rates Committee (ARRC) has released recommendations for intercompany loans based on the Secured Overnight Financing Rate (SOFR), the ARRC’s preferred alternative reference rate to US dollar LIBOR.

As outlined in the document, the ARRC recommends that new SOFR-based intercompany loans use the 30- or 90-day Average SOFR set in advance, with a monthly, quarterly, semi-annual, annual, or other reset period as is determined appropriate by the firm. The 30- and 90-day Average SOFR incorporate several beneficial attributes that make these rates preferable to USD LIBOR, according to ARRC, as they:

  • Are highly robust and produced by the public sector in a way that is easily communicated and accessed by global authorities and private sector participants alike.
  • Can be used within the current systems for intercompany loans and do not necessitate significant changes to implement.
  • Represent sound, fit-for-purpose rates for intercompany loans that can be used immediately, not only for USD-based loans but also for loans denominated in a range of other currencies.

“These conventions for intercompany loans supply non-financial corporations with another tool to smoothly transition away from LIBOR,” said Tom Wipf, ARRC chairman and vice chairman of Institutional Securities at Morgan Stanley. “With important deadlines in the transition to SOFR rapidly approaching, the ARRC remains fully committed to listening carefully to corporate borrowers and supporting them through this transition.”

These recommendations were developed by members of the ARRC’s Non-financial Corporate Working Group (NCWG), which focuses on supporting non-financial corporations throughout the transition. The NCWG represents over 80 non-financial corporations across a wide set of sectors and coordinates actively with institutions on issues relevant to non-financial corporations, such as intercompany loans, back-office systems and the readiness of software vendors to accommodate needed changes, along with structures and conventions for borrowings by non-financial corporates, including syndicated and bilateral loans as well as special-purpose facilities to finance their working capital needs and capital equipment purchases.

 

BCB Group launches treasury service for corporates navigating digital assets

BCB Group, a global digital financial services firm, has announced the launch of BCB Treasury, a service designed for corporate treasury departments looking to get involved with digital assets.

As bitcoin price sentiment remains bullish and institutional interest picks up, corporations are beginning to understand that they need digital assets on their balance sheets. BCB Treasury provides a complete solution enabling access to treasury management for companies that wish to allocate part or all of their capital into bitcoin or other digital assets. BCB Treasury is an end-to-end service enabling treasury executives to enter, hold, manage, grow and report on a bitcoin-focused treasury strategy.

"We are seeing some powerful signals attracting companies to the digital asset space including the debasement of reserve currencies through unprecedented levels of central bank money supply," commented Oliver von Landsberg-Sadie, founder and CEO of BCB Group. "Some visionary CEOs, including MicroStrategy’s Michael Saylor and Tesla’s Elon Musk, are tuned into the coming-of-age of digital money and have led the way for the Bitcoin-treasury demand which BCB is well equipped to meet.”

 

FIS to recognise innovative use of technology at 2021 awards

FIS is now accepting submissions for its 2021 Impact Awards. In its fifth year, the Impact Awards program recognises forward-looking organisations for their innovative use of FIS technology to enhance customer service, drive tangible business results, and advance commerce and the financial world. Entries are independently judged by leading industry analyst research group Celent. For each winning entry, FIS will make a US$10,000 donation to a charitable organisation chosen by the winner through the FIS Foundation.

The 2021 programme is open to the full spectrum of FIS client and partners, including banks, corporations, credit unions, wealth and retirement managers and advisors, capital markets firms, insurers. For the first time, merchants served by FIS are also invited to participate in the programme. Clients and partners based in the US, the UK, Germany and France are eligible to submit nominations.

“The global pandemic has accelerated the shift toward digitisation as global organisations look for new ways to serve their clients and enable their remote workers,” said Gary Norcross, chairman, president and CEO of FIS. “Our annual Impact Awards programme offers FIS clients an opportunity to showcase their innovations while giving back to the community at a time when many are experiencing hardship.”

The deadline for submissions is end of day on Wednesday, April 14. Winners of the 2021 program will be recognised at a virtual FIS recognition event later this year.

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