Jackie Bowie and Amol Dhargalkar discuss the role of alternative capital sources in TMI treasurycast
Summary
TMI treasurycast sits down with Jackie Bowie and Amol Dhargalkar to discuss the role of alternative capital sources and the opportunities and challenges borrowers may face over traditional means. They outline how to determine if alternative funding sources are appropriate depending on the business.
While disruptions in the capital markets can happen at any time, there has been been a lot of disruption recently with inflation, rapidly rising interest rates, and growth in alternative assets. As funding markets are not expected to improve in the short-term, investors — now more than ever — are having to make tougher refinancing choices in a higher-rate environment.
Jackie Bowie in TMI treasurycast"Taking the alternative sources of capital doesn't change your risk exposures. You still need to be accessing the ability to hedge interest rates and FX, and it can completely change the providers you go for and the strategies you deploy to hedge that risk."
The banking crisis that took place earlier this year has brought to light that companies are directly exposed to their counterparties. If the counterparties are not available to provide the liquidity that they think they have, borrowers are changing their strategy and starting to turn to different sources of funding.
Amol Dhargalkhar in TMI treasurycast"It's only a matter of time before investment grade issuers, treasurers, and CFOs are taking a step back and saying, 'I could do this plain vanilla bond, but I really don't want to. We want to do something with more flexibility associated with it. Are there products like that out there?'"
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