Despite hefty operational constraints, the BAE Systems 12-person treasury team executed an impressive body of work across five, critical domains:
1. Corporate finance
Here, the team arranged a $2bn bridge facility, followed by a US capital markets transaction, which together enabled the closure of two major US-based acquisitions in a tight time frame – and at record-low borrowing costs. A further US capital markets deal in the early stages of the pandemic facilitated a £1bn funding contribution to the BAE Systems pension scheme, reducing the deficit, and the team worked closely with credit ratings agencies to ensure there was no downgrade of the firm’s investment-grade rating.
2. FX and treasury operations
To boost liquidity amid stressed conditions, the team swapped bond proceeds from fixed USD to fixed GBP via two separately managed swap auctions, with just a two-week interval between them. Some of the cross-currency basis was pre-hedged, enabling the team to advise BAE Systems’ relationship banks of the firm’s imminent request to quote on the cross-currency swaps. That provided the banks with sufficient advance warning to secure credit approval.
The team also upgraded its treasury management system (TMS) against a backdrop of complex security requirements.
3. Corporate governance
In the fields of trade finance, export finance and currency hedging, the team provided support to the wider firm in Australia, the US, Sweden and elsewhere.
4. Cash and risk management
To finance the £1bn pension fund contribution, the team accessed the US commercial paper market just two weeks before the COVID-19 crisis escalated.
Throughout the year, the team monitored group cash, setting up a group-wide, rolling, weekly cash forecast.
5. Export finance
The team worked closely with governments and customers to refinance two complex export contracts in a compressed time frame.
All the team’s work had a positive impact on the organisation. For example, the debt raising and bridge loan enabled BAE Systems to make strategic investments. As COVID-19 continued to dominate, the team missed no deadlines – earning a special Chairman’s Award for Innovating for Success.
“The mark of an exemplary treasury performance is the execution of a range of complex tasks under pressure across the entire function.”
While adapting to new ways of working imposed by COVID-19, National Grid’s treasury team led an array of restructuring and financing initiatives, including the transformational acquisition of Western Power Distribution and related strategic portfolio repositioning. Those efforts also encompassed some notable company firsts, such as National Grid’s debut green bond issuance and an industry-leading, export credit agency-backed financing for the Viking Link project – the world’s longest electricity interconnector. The judges were impressed with the breadth of tasks accomplished.