LONG VIEW IT HAS BEEN A TURBULENT COUPLE OF YEARS FOR GLOBAL SUPPLY CHAIN MANAGEMENT... EXPOSING DEPENDENCE ON A SINGLE SOURCE KEMI BOLARIN Bonds and access to capital The ability to access capital markets will also be a carefully watched area in the months ahead. More than ever, treasurers will need to be in a state of preparedness. The market for investment grade debt has been relatively stable, Griffiths points out, albeit more expensive. High yield has been highly volatile, however. I suspect things will gradually improve next year, he says. Weve seen in the last month or so mild improvements in conditions, and when that happens, we often see companies go to market. Demand is definitely there. Market activity was dampened in 2022 because a lot of the companies that would have refinanced last year had already done so in 2021. So, you had a combination of rates getting higher and very few companies actually having to access the market because the maturities got pushed out so much when rates were cheap in 2021. If you step right back from it, you start to see maturities and they get really quite substantial in 2024. Typically, companies will start thinking about a refinancing about a year before they have to, which means that in 2023 there is going to be a lot more demand for new debt. One side of that equation is going to be very different to what it was in 2022. One of the problems financial markets bond markets have had is working out where the peak interest rate is. If you can work out peak inflation, you can start to price things properly. If you simply dont know, it becomes very hard to take a view, says Griffiths. Investor relations The volatile situation has increased interaction with investors and backers. Weve done a lot of work with our debt and our securitisation investors, says Wilde. Weve created an investor relations team to reach out to them regularly. With investor relations, you do the work beforehand, he says. With liquidity and access to capital markets more constrained, both investors and issuers will have to move more swiftly to get deals away. The danger is that investors may have to walk away from deals if they lack time to carry out the necessary due diligence, Boyce suggests. Non-deal roadshows, which were more of a feature prior to the Global Financial Crisis, are increasingly back on the table, she says. Potential issuers can position themselves and everybody can be lined up and ready to go, so that when the market opens everyone can move very quickly, she says. Geopolitical risk and sanctions With recessions a reality for key economies this year, companies will continue to grapple with uncertainty, scanning the horizon for changes in outlook. Kemi Bolarin, head of treasury for Europe at contract logistics giant GXO, is keeping geopolitical risk firmly in her sights. Where and how the company operates, the reality of complying with international sanctions and the need to consider client businesses as well as their own GLOBAL OUTLOOK Overall, the picture might not be as limiting as it first appears. JP Morgan expects sluggish growth of around 1.6% in 2023 for the global economy, as financial conditions tighten. But as Deloitte chief economist Ian Stewart points out in a recent economic bulletin from the firm, pockets of growth persist. The IMFs widely reported forecast that one-third of the world economy will fall into recession in 2023 could more optimistically be expressed as meaning that two-thirds of the world economy will avoid recession. The reality is that the global economy will continue to grow this year, albeit at a slower pace than in 2022. 10 ISSUE 1 2023 treasurers.org/thetreasurer TT ISSUE 1 23 pp6-11 cover feature.indd 10 23/02/2023 09:03