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US corporates aim for cash repatriation in Q2

Repatriation of cash to the US is back on the agenda for corporate CFOs and treasurers, with 63 per cent of US respondents survey planning to repatriate cash in 2018, according to a survey of some of the world's largest companies. The repatriation of cash is linked to the recent changes to the US tax law, which now allows a one-time repatriation of overseas cash to the US, at a tax rate of 15.5 per cent. According to the 2018 ICD Client Survey Results by institutional investment company Institutional Cash Distributors (ICD), a third of the companies surveyed said they would be repatriating cash to the US in the second quarter of the year. ICD polled its clients, including seven of the top 11 S&P 500 Index companies ranked by overseas cash balances. ICD's Tom Newton said: “We are beginning to see the first wave of repatriated investments coming in and are preparing for increased demand in Q2.”

Move to MMFs

Related to the imminent inflow of cash to the US, the survey also found that US prime money market funds (MMFs) are seeing increasing demand due to higher yields. This makes sense because companies are looking for somewhere to park their repatriated cash. Currently, 42 per cent of US respondents are invested in US prime MMFs but this is projected to grow to 63 per cent by the end of 2018.

System upgrades

Updating new technological capabilities is also a priority for corporate treasury departments: 19 per cent of the survey's global respondents plan on changing or adding a treasury management system (TMS) over the next 12 months. According to the survey, the most widely used TMS platforms are Kyriba, ION, Logotech and Sungard.


This item appears in the following sections:
Cash & Liquidity Management
Cash & Liquidity Management in North America
Global Cash Visibility
Releasing Trapped Cash

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