Off-shore expansion spurs Euromarket investing. (Basis Points) (Column)

The couple seated in front of me was clearly prepared for a vacation. The plane had just lifted off the runway at Los Angles and swung into its flight path to the East Coast, when the man pulled a carry-on bag out from under the seat in front of him and started digging through it, searching for something.

"Honey, did you see my CASHFLOW magazine?" he finally asked his wife.

What were the odds of this happening? Who wrote this script? How could I not introduce myself? I learned he was the CFO of a West Coast high-tech company. They were combining a vacation with a visit to his European subsidiary.

Many U.S. corporations have taken advantage of opportunities presented by the European Economic Community by establishing off-shore facilities. The economic advantages are well documented. Less organized is what the acquisition of a new foreign unit can do to a domestic cash management program.

Many a cash manager who has always been able to assume that cash was dollars suddenly finds himself or herself responsible for foreign exchange, currency hedging and foreign investment. The hands-on manager may be logging international miles these days.

Often a European operation must invest several currencies. Making local investments abroad may mean evaluating vastly different investment structures for safety, computing all investment yields off a spread to LIBOR (the London Inter-Bank Offered Rate) to make them comparable, and sometimes even using different LIBORs! And each investment's yield may be repatriated into dollars differently.

You titans of finance with foreign investment …