Weekly Finance Tips

Archive for the ‘Alternative Financing’ Category

The terms of the issuance of commercial paper can be found in the provisions of Article 2 to Article 5 of Decree No. Directors of Bank Indonesia. 28/52/KEP/DIR dated August 11, 1995, namely:

criteria

1. Longest term of 270 (two hundred seventy) days
2. Issued by non-bank firms in Article 1 point 9 of this decree.
3. lists

* Clause able and the words “Letter Able” in the text and expressed in the Indonesian language.
* The promise is not conditional to pay a certain amount of money.
* Determination of day’s pay
* Determination of payment
* The name of the party who must receive payment or its successor
* Date and place of promissory notes issued
* Signature of issuer

On the home page of commercial paper at least the matters listed as follows:

* The words “Commercial Securities” (Commercial Paper) which are written the words “Letter Able”
* The statement “without protest” and “no cost” as referred to in Article 176 in conjunction with Article 145 Commercial code;
* Name of bank or securities company and the name and signature of bank official or corporate securities designated as agent of the Commercial Paper sign of authenticity, without the placement of company logo or a striking effect;
* Name and address of the bank or company that is designated as the payer without placement of a bank or a company logo prominently;
* The serial number Commercial Paper;
* Note how the monetization Commercial Paper as stipulated in article 4 of this decree.

There are two ways of issuing securities, namely:

* Publishing directly to long-term investors such as financial institutions, or

Publishing is usually done directly by the financial institution that has a constant need for loans in large numbers who choose to direct the issuance of more economical than using investment brokers. American companies to issue commercial paper directly can save 3 basis points (1 basis point = 1 / 10000%) annually. Outside the U.S. investment brokerage fee is cheaper.

* Publishing indirectly is sold to brokers and brokers is exactly what trading it in the money market.

Stock trading securities involving commercial brokerage firms and subsidiaries of large banks many of which are also the brokers in the U.S. financial markets (U.S. Treasury Securities)

Commercial papers or Commercial paper [1] is in money market securities issued by large cap banks and companies. Typically these instruments are not used as a long term investment but only as the purchase of inventory or for working capital management. Where these instruments are usually also be purchased by financial institutions because of its nominal value is too large for individual investors, and included in the category of a very safe investment that yields of commercial paper is also low. There are four basic forms of commercial paper are:

1. Promissory notes pay-
2. Check
3. Deposit
4. acceptors (bank draft)

Because the maturity of commercial paper is not to exceed 9 months, and its use only for purposes of payment transactions then commercial paper is exempt from the obligation of registration as a securities can be traded by the U.S. stock market watchdog commission (Securities and Exchange Commission-SEC)

Commercial paper in Canada is defined as securities that have a maturity period not exceeding one year and is therefore exempt from registration and prospectus publishing [3]

If a business has been so great and have a high credit rating then the use of commercial paper as a source of financing will be cheaper than using a source of financing from bank loans. So that these securities can be considered an alternative source of financing other than banks. However, many companies still take the credit facility as a protection for the issuance of commercial paper. In such circumstances, banks often charge fees for such credit facility despite the fact that the loan funds have not been used. Although these benefits are likely an advantage for the bank but if the company is using the credit facility to pay for securities maturing commercial company it often will be difficult to repay the loan taken.

At present more than 1,700 companies in America that issued commercial paper in which financial institutions are the largest publisher in 1990 based on data in which financial institutions are issuing 75% of the outstanding commercial paper and the remaining 25% are issued by companies engaged in the manufacturers, public utilities, industrial and service industries.

Sports Field development will inevitably take the land and substantial funds and in its implementation would require space management and financing. In this case will be discussed about the financing of this soccer field. The field development requires approximately $ 100 jt’s with the desired standard pack of ministers drainage is good, flat land, low prices, using local materials such as grass and wood beams can be drawn from the surrounding environment. Ministers will pack its plan to build a soccer field with the help of the state budget metalanguage. Nothing wrong with the development of this field with the state budget but who need to be taken into account is to bear the burden of state and also the interests, the political will of the House of Representatives. With these considerations into account it is more wise if other financing sources. This field development in the thinking of writers can use various sources of funding halted from government bonds, Joint Venture, BOT, CSR, or community participation. Development of this field can Delora with a commercial or public facility. In managing both require a management mechanism so that people who want to play can be orderly and not chaotic. A fair and orderly arrangement is needed in its management. If the soccer field was created as a public facility the scenario is to start from the state budget financing, bonds, Joint Venture, CSR and community participation. The explanation is like this:

Budget: Budget of use can be done because with this financing will be in state ownership or government’s aimed at making it more social and can also disinfectant with the apparatus in areas ranging from the district level, District, Village and Village.

Government Bonds: Bonds are another form of government debt to private. The process is the Government only issued bonds with a value corresponding to the needs of the soccer field development funds at the district level or merged with other development and auctioned to the private sector. This fund provides power to the government as well as the state budget. Money Debt Bonds Bonds or the buyer only has the authority or have rights in the repayment of money and interest Nanjing country.

Joint Venture: a combination of government financing and private. This funding source is a source of financing that will make little discussion or debate because in this venture both parties have the power of the funds provided. And if the composition of capital as strong it will be little debate the populist orientation of government and private profit. But if more government capital will not be a problem.

CSR: is the provision of private funds as a form of compensation for business profits. Large grants depends on the company. Major mining companies such as CSR will have a large and small companies must have a small CSR as well. It depends on how to obtain and manage CSR in Indonesia are managed either by district or sub district, so set up a CSR that the maximum revenue that can be used as funds for the construction of a football field. Please note the number of companies that exist in every district or districts are not equal between regions. With these funds could be in the public power

Citizens Participation: This is a self-financing resources from the community. Community funds and the results obtained from fund raising are used to construct the field

It is a source of financing that can be used to finance the soccer field with power management and the government-controlled society and the status of public facilities. In this society pentathlon can also use a form of payment Seinfeld maintenance fee so that his or her help with the costs of care and can also preserve or temperance facilities.

If a Football Field facility was created as a credible form of paid then whether this activity can be managed by government or private only? if the government could also then the source of financing is state budget or the budget, bonds, Joint Venture, CSR, Community Participation. Financing sources above can be used to build a soccer field which is also the commercial and public facilities with power are on the government and society. Sources of financing that can be used to build a soccer field that is commercial and is privately managed with appropriate financing source is the Joint Venture and the BOT. difference is the power of the government and the private sector orientation. Private ownership will surely further increase prices or rates for for-profit aims.

BOT Financing sources are sources of private financing which has the power to build up government land into a football pitch and managed to find an advantage over start-up capital. After the initial capital are met then the business is returned to the government.

Use of appropriate private sector can effectively improve immunization resources. Resources may not be cash. For example, by supporting the private sector such as doctors who provide immunizations, the program can expand its ability to provide immunization services. Private sector participation may be encouraged through provision of cold chain equipment or supplies of vaccine.
Tip! This strategy is highly dependent on government policy and, most likely, it is very difficult to influence.

Objective: Increase political commitment
Possible Strategy:

* Promote the allocation of resources based on cost effectiveness and the principles of public finance.
* Promote public demand for immunization. Increased public demand may lead to increased political commitment.

Objective: Access or increase domestic funds
Possible Strategy:

* Make sure immunizations are at highest health priorities of the government.
* Develop an element in the budget (line item in budgetary Development)
* Get a political mandate and / or legal basis for the level of funding. Namely, encourage political promises or laws to ensure that the minimum amount of domestic resources allocated to immunization programs.
* Negotiate an additional level of funding (national and sub-national).
* Make sure the target of immunization is included into the document and the national financial planning, such as Poverty Reduction Strategy Paper.
* Make sure the immunization budget and planning cycles are included and synchronized with the planning documents and the national finances.
* Develop a financial plan immunization
o Make sure the relevant parts incorporated into national planning documents.

Objective: Access or increase the external donor funds
Possible Strategy:

* Identify new donors, including NGOs and multilateral agencies.
* Develop a targeted approach depends on the components of funded programs.
* Demonstrate government commitment to finance the program by adopting key policies and actions and related programs that can improve efficiency and ensure a certain level of domestic funding for immunization programs.
* Advocate the support of non-vaccine costs are recurring.
Comments: Donors often prefer direct resources rather than capital goods because they can see and monitor the use of their funds and they consider providing recurrent costs to be financed government improve sustainability. Also, these funds are typically used to buy from suppliers who may support the mission of international development agencies.
However, the purchase of capital goods is almost always increase the burden of recurrent costs to the state. Investing in capital goods could reduce the incentive for governments to seek more cost-effective solutions, such as outsourcing. Thus, encouraging donors to help the recurrent costs rather than automatically fund the cost of capital goods.

Setting up projects will be funded from the bond funds and its cash flow calculation that can be easily analyzed and accounted for with the assumptions that surrounded him. Calculation of cash flow from here is very important because investors will be able to see whether the project or the relevant local government will be able to generate enough revenue to pay the obligation runs. Projects will be funded through these bonds should be a project that gives multiplier effects to the overall regional development, for example, highway that can enhance regional economic growth and stimulate the real sector to move. Revenue not only from the highway that was built but also from taxes generated due to movement of the local economy.

Determine the magnitude of an investment fund

Local government will formulate the necessary amount of funds through the issuance of bonds. Then the government can immediately set up the structure of bonds, including tenor and yield that could be borne governments as well as yield issuers in accordance with the level of expectations that the market will absorb the bonds, as well as marketing strategies for bond investors find buying interest.