Saab 2010 Annual Report Download - page 118

Liquidity and financing risks
Liquidity and nancing risk refers to the risk that the company will not be
able to meet its payment obligations due to insucient liquidity or diculty
raising external loans on acceptable terms.
According to the Group Treasury Policy, Saab must always maintain unu-
tilised credit facilities or liquid assets corresponding to the higher of (but not
less than  ,):
•  per cent of sales
•  per cent of outstanding on-demand guarantees for the three largest
commitments
Liquidity and nancing risks are minimised by diversifying nancing
sources and maturities.
Saab’s policy is to insure on-demand guarantees for major projects
against unauthorised use. is applies to contracts where the counterparty is
classied as a developing country according to the denition of the Export
Credits Guarantee Board (). Insurance can be obtained from state guar-
antee institutions or the private insurance market.
Saab has access to the following credit facilities:
Loan facilities
MSEK Facility Utilised Available
Club loan (matures 2012) 4,000 - 4,000
Total confirmed credit facilities 4,000 - 4,000
Commercial paper 5,000 - 5,000
Medium Term Notes (MTN) 3,000 1,100 1,900
Receivables financing 1,475 1,409 66
Total loan programmes 9,475 2,509 6,966
Total loan facilities 13,475 2,509 10,966
e club loan is a credit facility with an equivalent value of  , from
seven banks that expires in . No nancial covenants are attached to the
club loan or the other credit facilities.
A commercial paper programme with a limit of  , is available as
well. Neither the commercial paper programme nor the club loan were used
in .
In , Saab established a Medium Term Note programme () with a
limit of  , or an equivalent value in . e  programme pro-
vides access to nancing for up to  years, which is an element in diversifying
loan maturities.
e Parent Company also has   in nancing arranged in connec-
tion with the acquisition of . per cent of the shares inAker Holding  in
. Saab’s investment amounted to approximately  . billion, of which
about  per cent was nanced through the above-mentioned loans. e risk
associated with the loans has been reduced through agreements that secure
this part of the invested amount, because of which the transactions in the con-
solidated statement of nancial position are netted as a receivable according
to Note . e interest on part of the above-mentioned loans is hedged with
an interest rate swap that has been identied as a hedging instrument and is
therefore recognised according to hedge accounting. No ineciency has
arisen in connection with this hedge.
Net liquidity/debt
Net liquidity excluding interest-bearing receivables and provisions for
pensions amounted to  , (-,) on  December . Liquidity
varied during the year, and surplus liquidity was placed as per the Group
Treasury Policy. At year-end, placements in interest-bearing securities and
bank deposits amounted to  , (,).
Net liquidity
MSEK Note 31-12-2010 31-12-2009
Assets
Liquid assets 31 2,544 1,463
Short-term investments 25 1,544 551
Total liquid investments 4,088 2,014
Short-term interest-bearing receivables 27 617 575
Long-term interest-bearing receivables 27 150 394
Long-term interest-bearing financial investments 25 147 32
Total interest-bearing assets 5,002 3,015
Liabilities
Short-term interest-bearing liabilities 35 589 2,519
Long-term interest-bearing liabilities 35 1,117 1,126
Provisions for pensions 37 5 4
Total interest-bearing liabilities 1,711 3,649
NET LIQUIDITY/DEBT (-) 3,291 -634
As of  December , net liquidity amounted to  , (-) with an
average during the year of   (-,). e net of interest expenses
paid and interest income received amounted to  - (-). Of the liquid
investments of  , (,),   () was pledged as trading secu-
rity to . e sensitivity analysis below shows the eect on income of an
increase in market interest rates and the credit margin of  basis point for
Saab’s investments.
Placements in interest-bearing securities and bank deposits
Sensitivity analysis of financial risk
MSEK
Maturities
Fixed
interest
Effect of
market in-
terest rate,
1%
Tied-up
capital
Effect of
credit
spread,
1%
Effect on
financial
costs
1 year 2,745 27 2,745 27 54
2 years 600 6 600 6 12
Total 3,345 33 3,345 33 66
Adjustments
Adjustment of book
value compared to
nominal value 29 - 29 - -
Total 3,374 - 3,374 - -
Current interest-bearing liabilities mainly consist of liabilities to joint ven-
tures of   (). Long-term interest-bearing liabilities amount to
 , (,) and mainly consist of s in issue. Of the long-term
interest-bearing liabilities,  , (,) matures within - years and
  () in more than  years.
e maturity structure of liabilities to credit institutions is indicated in
the tied-up capital column of the “Sensitivity analysis of nancial risk” table.
e volume of tied-up capital includes interest rate swaps. e interest rate
risk in the loans given a  basis point parallel shi in the yield curve was
 () as of  December . e sensitivity analysis below shows the
impact on results of an increase in market interest rates and an equally large
increase in the credit margin of  basis point for Saab’s renancing of credits.
NOTE 41, CONT.
FINANCIAL INFORMATION > NOTES
SAAB ANNUAL REPORT 2010 115