Keeping an Eye on the Eurozone

At GlaxoSmithKline, group treasurer Sarah-Jane Chilver-Stainer has issued a record-breaking dollar bond issue and reorganized the treasury team.

It’s fair to say that Sarah-Jane Chilver-Stainer is a high achiever. When she spoke to Treasury & Risk earlier this month, she had just completed a record-breaking dollar bond issue for GlaxoSmithKline, the London-based pharmaceutical and healthcare company. The $5 billion issue, which attracted $15 billion in demand, included three-, five- and 10-year notes with coupons of 0.75%, 1.5% and 2.85%, respectively—the lowest coupons ever achieved on U.S. dollar bonds sold by a UK company.

For Chilver-Stainer, the transaction was just the latest in a series of accomplishments at GlaxoSmithKline (GSK), which had $44.2 billion in 2011 revenue and employs more than 97,000 around the world. GSK’s group treasurer and senior vice president recently set up a new pension risk management team and took on responsibility for the company’s insurance activities. She completed a major reorganization of the treasury team at the beginning of the year and recently established an in-house bank.

Minimizing risk is a top priority across these functions. For example, the investment portfolio is mostly invested in AAA-rated Treasury-only money market funds. Meanwhile, GSK is closely tracking the impact of the eurozone crisis and chief executive Andrew Witty revealed in February that the company is sweeping cash out of the eurozone every day.

“The European risk reduction agenda is a huge focus for GSK,” Chilver-Stainer says. “As well as sweeping cash back to London on a daily basis, we’ve looked to reduce other risks on the balance sheet—for example, we’ve sold some of our receivables portfolio in Europe. We’ve also created an enterprise-wide risk management project team, so if something does happen in Europe and we have to go into crisis mode, we have an established crisis management team in place.”

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