Holly Hess Groos has had a busy year and a half since becoming treasurer and senior vice president at Verizon Communications. A few months into the job, Groos faced a $5.3-billion credit facility that was expiring in April 2010. She worked to take advantage of the improved credit environment to extend the facility three years and upgrade it to $6.2 billion.
"What we found was that for a company with an investment-grade credit rating like ours, bank interest had expanded beyond the U.S., and we had five large foreign banks join the facility," Groos says. In the end, she was able to extend the facility by an additional 18 months, to 4.5 years, and have it expire in October—a better time of the year for refinancing.
Groos also oversaw a debt offering this year that raised $6.2 billion in long-term debt. "Our target was to raise $4.5 billion," she says, "but we left ourselves open to upsizing if interest rates and terms were right, and they were."
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In general, Groos says that for investment-grade names and credit, there are "no issues at this point in time" in borrowing money or debt issuance. Verizon, with $106.6 billion in 2010 revenue, has an A rating from Fitch, an A3 from Moody's and was downgraded from A to A- by Standard & Poor's.
"It's a funny thing with the ratings agencies," she says. "You need them, but you don't always agree with their decisions."
Her responsibilities grew a year after she took over as treasurer when Verizon Capital Group became part of the company's treasury operation, adding to her plate asset-based financing, tax credit investment activities and leasing and financing support for sales of equipment and services to business customers.
Groos, an accounting graduate of Miami University of Ohio who started her career in the communications industry as controller of NYNEX Computer Services in 1990 after working as a senior auditor at Deloitte & Touche, also gets credit for the continued growth of Verizon's captive insurance firm, which last year won the quirky-sounding "Outstanding Captive Award" from the Captive Insurance Companies Association (CICA).
Exchange Indemnity Co. (EIC) has $1 billion in assets, Groos says, making it one of the largest captives in the country. EIC has grown tremendously thanks to the company's decision to use the Vermont-domiciled operation to reinsure its cell-phone insurance business.
"You're supposed to include third-party business in a captive," Groos explains, "but we chose to include third-party business that was not unrelated to Verizon's main business. We wanted to be insuring businesses that we are familiar with." Some 75% of Verizon's insured assets are underwritten by EIC. Groos stresses that the CICA award was to "the whole team," not just to her personally.
Groos says she is working with a small team, one that has gotten slightly smaller not because of cost-cutting but "thanks to efficiencies."
Going forward, she says the challenge facing treasury operations like hers is that "volatility in the market isn't over. We've got our credit facility and have done a debt offering, but you can never be confident about a volatile market. You have to keep making sure you have good access to credit."
See the complete coverage of Treasury & Risk's 2011 Women in Finance list here.
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