Presented by CIPFA - North West Region Cecilie Booth, CPFA, Director Warrington, 28th June 2013.

Slides:



Advertisements
Similar presentations
REALTY KNOWLEDGE ARBITRAGE ADDING VALUE THROUGH AT LandSmiths Projects Pvt. Ltd. Credentials Statement.
Advertisements

LOAN PARTICIPATIONS - ACCOUNTING AND REGULATORY ISSUES DeLeon & Stang, CPAs and Advisors Allen P. DeLeon, CPA (301)
Using Loan Finance 19 November 2013 Mark White Lending Manager Wales – Charity Bank Mobile:
BORROWING POWERS. Capital is necessary for the establishment and development of a business and borrowing is one of the most important source of the capital,
Pension Fund Trustees Liability Ncedi Mbongwe. Introduction to Camargue Underwriting Managers Established in 2001 Underwriters: Mutual and Federal and.
AN OVERVIEW OF PROJECT FINANCE IN PRIVATE-PUBLIC PARTNERSHIPS FINANCE 101 T ERRI S MALINSKY Managing Director B.C.
Hedge fund flows on pace to nearly double 2012
MODULE 1 AS Marketing and Accounting and Finance COMPANY ACCOUNTS Sources of Finance.
Chapter 12. Account for stock dividends  Proportional distribution of corporation’s own stock to shareholders  Does not change total stockholders’
The following slides are approved for external use but may not be altered in any way. For additional information, contact Tom Agoston at Tom Agoston/Somers/IBM.
Innovations in Structured Products October 25, 2010 An Innovator’s Dilemma?
Public Policy Marc Cowling Brighton Business School.
PERFORMANCE BASED LENDING HOW MUCH MONEY IS THE BORROWER GOING TO NEED? TRY NOT TO GET INTO A POSITION WHERE ADDITIONAL MONEY IS NEEDED BEYOND THE ORIGINAL.
Mercer’s Climate Change Research 2011 to 2015
Prepared by Debby Bloom-Hill CMA, CFM. Slide 13-2 CHAPTER 13 Statement of Cash Flows.
Financial institutions in the agricultural sector: The Case of Aiyl Bank, Kyrgyzstan Ajai Nair, Consultant, The World Bank Expert Meeting on Managing Risk.
Business Ownerships MARKETING DYNAMICS UNIT 1 LESSON 2 Copyright © Texas Education Agency, All rights reserved.
How to Kick Start a Social Enterprise Joanne O’Brien T: E:
Introduction to Financial Institutions and Markets Financial System- implies a set of Complex and closely connected institutions, markets, transactions,
AUDIT COMMITTEES What are they and why are they beneficial?
By Ben Youn Copyright 2014 Quantum Business House WELCOME to QUANTUM BUSINESS HOUSE.
McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 13 Marketing Channels.
Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Copyright © 2010 Standard.
Investment Reform Lenders’ Interests November 2009.
INVESTMENTS: Analysis and Management Second Canadian Edition INVESTMENTS: Analysis and Management Second Canadian Edition W. Sean Cleary Charles P. Jones.
CHAPTER 1: THE PURPOSE AND USE OF FINANCIAL STATEMENTS
CHAPTER 14 PowerPoint Author: LuAnn Bean, Ph.D., CPA, CIA, CFE Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution.
Advertising Campaign Financial Planning Advertising, Sales and Promotion Unit 2, Lesson 10 Copyright © Texas Education Agency, All rights reserved.
Copyright © Texas Education Agency, All rights reserved. 1 Understanding Ownership Changes Statistics & Risk Management.
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication.
A legal perspective on Social Investment for the VCS David Hunter Consultant Charity and Social Enterprise Department BWB.
RECAP LAST CLASS. FINANCIAL SECURITIES & MARKETS DEBENTURE A DEBENTURE ALSO CALLED A NOTE IS AN UNSECURED CORPORATE BOND OR A CORPORATE BOND THAT DOES.
Principles of Business, Marketing, and Finance Financial Planning Copyright © Texas Education, All rights reserved.
34 th Gas-Lift Workshop Singapore February , 2011 This presentation is the property of the author(s) and his/her/their company(ies). It may not be.
Oracle E-Business Suite R12.1 Accounts Receivables Essentials Partner Boot Camp Training Courseware.
Chapter 2 – Introduction to Limited Company Financial Statements Accounting terminology Advantages of forming a limited company The Companies Acts / Governing.
Report on Jobs – Vacancy Trends 19 July 2012 Markit Economics.
HEDGEYE 1 SPEAKER SERIES: WALL STREET MEETS MAIN STREET May 6, RESTAURANT REMODEL ANALYSIS.
Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s. Copyright © 2011 Standard.
The secure site rendering issue (all navigation crushed together as a list at the top of the page) is a compatibility issue with Internet Explorer only.
“The Broken Banks” by Ian Priest A presentation for Biz-Smart.
Slide 13-2 CHAPTER 13 Statement of Cash Flows Learning objective 1: Explain the need for the statement of cash flows and identify the three types of.
Prepared by R. E. Harms CMA
How to develop and assess a good business plan
RISK MANAGEMENT SYSTEM
‘Diversified Growth Funds’ have become the go-to strategy
Summary of financial results for the period 1-6/2017
Chapter 4 Using Financial Statements to Analyze Value Creation
Chapter 3 Development of financial strategy
17 Chapter Financial Management. 17 Chapter Financial Management.
Financing the cashew sector
INVESTMENTS: Analysis and Management Second Canadian Edition
Credit Evaluation.
Value Creation and Successful Management
Managing Entrepreneurship: Small & Medium Scale Business
Principles of Business, Marketing, and Finance
Chapter 17: Investments Intermediate Accounting, 11th ed.
Main conclusions of the assessment of Tenders
Chapter 13 Cash Flow Statement. Chapter 13 Cash Flow Statement.
Financial Accounting: Tools for Business Decision Making
Navigating the Portal 18 December 2017 Version 1.0.
Chapter 18: Investments Intermediate Accounting, 10th Edition
KROLL BOND RATING AGENCY, INC.
Self-Registration walk-through
Financial Statement Analysis K.R. Subramanyam
Pamplona Credit Opportunities Fund
DISCLAIMER and COPYRIGHT RESERVATION
Environmental Upgrade Finance
TITLE Source: Footnotes:. TITLE Source: Footnotes:
Principles of Business, Marketing, and Finance
Presentation transcript:

Presented by CIPFA - North West Region Cecilie Booth, CPFA, Director Warrington, 28th June 2013

Loans to RSLs – Key initial issues for consideration 2 Relatively new area for most Local Authorities, so the facility needs to be based on a robust business case Assess the appropriate legal powers Counsel’s opinion Risk assessment Financial impact Member involvement – are members fully behind the legal / financial / risk parameters? Regulated / non-regulated activity CIPFA - North West Region - Warrington, 28th June 2013

Pre-lending considerations 3 The structure of the RSL, arrangements can be very different Consider the debt liability / borrowing relationship Consider the role of the RSL Board and the reporting arrangements Subsidiary companies – how are these structured? How robust is the RSL Business Plan? How robust are assumptions in the RSL Business Plan? Existing track record of delivering the Business Plan Asset Management Plan / Stock Condition Survey CIPFA - North West Region - Warrington, 28th June 2013

Pre-lending considerations 4 Secured or un-secured lending? Secured lending and first charge is ok, but what happens in the event of default? Level of asset cover required Rate of interest to be charged Market rates – how are these assessed and compared? Soft Loan implications? CIPFA - North West Region - Warrington, 28th June 2013

Pre-lending considerations - Risk Management issues 5 What happens if there is a default? Would the Local Authority want to manage the stock directly in the event of default? Strategic fit / local context Financial impact Impact on Local tax payers Good Due Diligence will address all the above issues – and the issues will be different for each business case CIPFA - North West Region - Warrington, 28th June 2013

Due Diligence – issues identified in current Business Cases 6 Borrowing nearly equal to debt liability Limited levels of reserves 47% of borrowing at short term variable rates Interest swaps included in other borrowing Failure to obtain desired level of credit rating Impact on market lenders Risk to profit levels if interest rates increase – could turn profits into losses HCA’s position – looking at self regulation RSL Business plan covers 5 years only CIPFA - North West Region - Warrington, 28th June 2013

Due Diligence – issues identified in current Business Cases 7 Subsidiary – decrease in asset value to £8m, but interest bearing loans over £17m (all at variable rates) Main group contribution of a further £5m Building properties for sale, but no (or weak) risk assessment Lack of risk awareness and general risk management and mitigating controls, the Board may not fully understand the current risk. CIPFA - North West Region - Warrington, 28th June 2013

8 Disclaimer CIPFA - North West Region - Warrington, 28th June 2013 Sector Treasury Services Limited (“Sector”) does not warrant, either expressly or impliedly, the accuracy, timeliness, or appropriateness of the information contained in this document. Sector disclaims any responsibility for content errors, omissions, or infringing material and disclaims any responsibility associated with relying on the information provided in this document. All materials, content and forms contained in this document are the intellectual property of Sector and may not be copied, reproduced, distributed or displayed without Sector’s express written permission. If you have not received this document from Sector you must not disseminate, copy or take any action in reliance on it and should notify Sector immediately.