Transfer Pricing

Transfer Pricing

Posts 1-3 of 3
  • Gordon Hands
    Gordon Hands
    The company name is only visible to registered members.
    Pricing Intercompany Loans
    A copy of our recent article (published in the Sept 24, 2009 issue of BNA's Transfer Pricing Report) on pricing intercompany loans is downloadable at the below address. Note: I've tried providing a direct link to the article, but you may have to register on the site first and then look in Resources/White Papers.

    http://www.cuftanalytics.com/index.php?id=16
    • 23 Nov 2009, 7:01 pm
  • Hans W. Waldvogel
    Hans W. Waldvogel    Premium Member   Group moderator
    The company name is only visible to registered members.
    Re: Pricing Intercompany Loans
    Many thanks!

    Please write sometimes more about your company.

    Whats about loans and interest waiver to economically weaker subsidiaries abroad?

    Kind regards,
    HWW
    • 24 Nov 2009, 08:44 am
  • Gordon Hands
    Gordon Hands
    The company name is only visible to registered members.
    Re^2: Pricing Intercompany Loans
    Hi Hans,

    Thanks for the welcome. I have invited my business partner to joing Xing and this group and my understanding is that once he does a company profile will be generated automatically. I assume then that we will be able to make changes to that profile to add descriptions of our services. Some general background is that between us we have over 18 years transfer pricing experience with all types of transactions and industries. Of course being from Calgary, Alberta, Canada we both have considerable experience in oil and gas and we have found this sector to be very active in M&A and also very conscientious of transfer pricing planning particularly around financing their acquisitions and other activities around the globe which is one reason we have developed our experience with intercompany financial transactions.

    In terms of our methodologies, we do not use bond data to price either interest rates or guarantees which I presume is contrary to most other practitioners. What we do use, and benchmark to, are arm's length credit facilities, most of which are filed with the SEC but we do have a considerable database of transactions from other countries. We also use a concept called expected loss (EL) (which is something financial institutions also use to measure credit risk and price transactions to their borrowers) to make comparisons between the credit quality of the borrowers (i.e., the tested borrower and comparable borrower). Additionally, as EL is measurable using tools provided by credit rating agencies such as Standard & Poor's and Moody's we can also make adjustments for differences in the seniority and security class of the instruments, the tenor, credit cycle (or execution date) as well as for differences in industry and geography. We feel this is a very robust more defensible solution (since it is more aligned with how financial institutions price instruments) and it's something we can deliver very quickly and at a relatively low cost because of the tools we have developed internally.

    I hope this answers your questions, but please feel free to contact me if you (or others) would like to learn more. I've not yet investigated how to unhide my contact information in Xing so if you would like my email address is gordon.hands@cuftanalytics.com. We also have skype numbers, 44 020 3239 1432 for UK/Europe and (347) 482-1458 in North America.

    Kind regards,
    Gord
    • 24 Nov 2009, 10:29 pm