Investing cash: the ins and outs of liquid investing in today's complex markets

Article Abstract:

Several investment instruments can protect a company's principal, while assuring liquidity and providing acceptable returns. Offerings of certificates of deposit and bankers acceptances by commercial banks have been augmented by loan participation certificates. Tax advantages are provided by adjustable rate preferred, convertible adjustable preferred , and money market preferred securities. These equity instruments are eligible for the 70% exclusion on intercorporate dividends. Treasury managers should choose their investment instruments on the basis of safety. Liquidity, yield, and the risk-return trade-off of the different securities are the measurement criteria for the investment choices.

Methods, Evaluation, Investments, Cash management

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Raising cash: commercial paper sets the rates, but banks fight back with loan sales

Article Abstract:

Unstable, short-term money markets are affected by changes in deregulation, mergers and acquisitions of banks, redeployment of assets, capital adequacy, and relationship banking. Loan sales are growing faster than domestic commercial paper (CP) and 'Euro' CP for short-term corporate financing. Banks dominated the 1987 market by selling $292 billion in commercial and industrial loans, which was 58% of the total and gaining another 10% of the market by selling 10% of the total CP. The growth of the CP market has caused a reduction in dealer commissions despite the large volume of notes that must be issued. The fledgling Euro CP market is estimated at $40 billion.

Management, Marketing, Loans, Commercial paper, Commercial paper (Financial instruments)

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