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Repo cash management: how it works for Microsoft

Repo cash management: how it works for Microsoft

Collateral management specialists, such as Euroclear, have been convincing more and more corporate treasurers to discover the benefits of using repo for cash management.

Generally, repo is a newcomer to the treasury toolbox but it is gaining traction as treasurers begin to feel more comfortable with its flexibility, high level of security and the possibility to pick up some additional yield. 

Microsoft: A client’s story

Microsoft was looking for a suitable and very secure liquidity management vehicle for the EUR cash it had pooled as it worked through the latter stages of a recent acquisition. Initially the company invested in EUR-denominated debt and commercial paper taking short-term positions.

The acquisition closing date was uncertain and this meant that Microsoft needed to have a great deal of flexibility with regard to the terms. The company did its research and discovered that the majority of the dealers with whom they benchmarked held most of their EUR collateral at Euroclear.

A decision was taken to engage Euroclear as triparty agent to carry out all the administrative work for a number of repo transactions.

This article first appeared in Treasury Today magazine

Collateral Directions

“It was a priority for us to work in a very secure and fully collateralised environment  with flexible settlement dates”

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