The debt financing of the Saab Group is managed centrally by Group Treasury in order to ensure efficiency and risk control.
The main principles for the funding strategy of Saab are:
- Flexibility
- Diversification
- Anticipation of business requirements
It is Saab Group's policy that in order to meet business requirements the Group should always have access to unutilized committed credit facilities (or equivalent in free cash) exceeding the highest of:
- 10 percent of Group turnover
- 50 percent of total amount of outstanding on-demand guarantees
The group funding strategy is focused on minimizing refinancing risk and diversification of the funding sources as well as maturities. In order to achieve this Saab currently have the following facilities:
- Revolving Credit facility MSEK 4,000 (2012-03-17)
- Commercial Paper Programme (CPP) MSEK 5,000
- Back-up facility for the CPP of MSEK 2,100 (2010-02-15)
Saab also launched an MTN programme in November 2009.
Saab AB (publ) MTN Prospekt 2010 This document is only available in Swedish
Market conditions and alternative sources of funding are continuously evaluated.
The Group has close and strong relationships with a limited number of core relationship banks.
Revolving Credit Facility
The commercial paper programme (see description below) has replaced the short-term financing through the club loan and thereby ensures an available backup facility.
The club loan is a facility that is a so-called club loan with an equivalent value of MSEK 4,000 from eight banks that expires in 2012. The credit margin is 0.25 percentage points over STIBOR or similar rate depending on the currency in which the facility is utilized. The commitment fee is 0.08 percent per year on the unutilized amount. No financial covenants are attached to the club loan or the other credit facilities.
Commercial Paper Programme
In order to enable borrowing from the capital markets, as an alternative to bilateral bank loans, Saab established a Commercial Paper program in 2008.
The Commercial Paper programme established in February 2008 allows Saab to borrow in SEK and EUR. Initially limit on the programme gave Saab the opportunity to issue paper in SEK up to a maximum amount of SEK 3,000, 000, 000, or equivalent in Euros. The limit on the programme was extended to SEK 5,000, 000, 000, or equivalent in Euros, in June 2008.
SEB has arranged the programme and, together with Danske Bank and Swedbank, acts as Market maker.
For further information about the commercial paper programme, please follow the link to the prospectus on your right hand side (in Swedish only). In addition, contacts for purchase and selling will be found on the last page in the prospectus.