Saab 2011 Annual Report Download - page 127

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  ,):
tŝŜQFSDFOUPGTBMFT
tšŜQFSDFOUPGPVUTUBOEJOHPOEFNBOEHVBSBOUFFTGPSUIFUISFFMBSHFTU
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 2016) 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 1,515 872 643
Total loan programmes 9,515 1,972 7,543
Total loan facilities 13,515 1,972 11,543
e club loan was renegotiated and extended one year before expiration. e
club loan is a credit facility with an equivalent value of  , evenly
divided between eight banks and expiring 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.
During the year, the entire shareholding in Aker Holding  was divested
and related loans of   and derivatives were repaid.
Net liquidity
Net liquidity excluding interest-bearing receivables and provisions for
pensions amounted to  , (,) on  December . Liquidity var-
ied during the year, and surplus liquidity was placed as per the Group Treas-
ury Policy. At year-end, placements in interest-bearing securities and bank
deposits amounted to  , (,).
Net liquidity
MSEK Note 31-12-2011 31-12-2010
Assets
Liquid assets 31 1,918 2,544
Short-term investments 25 4,555 1,544
Total liquid investments 6,473 4,088
Short-term interest-bearing receivables 27 368 617
Long-term interest-bearing receivables 27 99 150
Long-term interest-bearing financial investments 25 143 147
Total interest-bearing assets 7,083 5,002
MSEK Note 31-12-2011 31-12-2010
Liabilities
Short-term interest-bearing liabilities 35 520 589
Long-term interest-bearing liabilities 35 1,218 1,117
Provisions for pensions 37 12 5
Total interest-bearing liabilities 1,750 1,711
NET LIQUIDITY 5,333 3,291
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 2,632 26 1,992 20 46
2 years 1,348 13 1,785 18 31
3 years 697 7 900 9 16
4 years 730 7 730 7 14
5 years and
forward - - - - -
Total 5,407 53 5,407 54 107
Adjustment 1) 231 - - - -
Total 5,638 - - - -
1) Adjustment of nominal value compared to book value due to market valuation at a premium or discount.
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 inter-
est-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.
Financing (refers to utilised credit facilities)
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 -1,472 -15 -872 -9 -24
2 years -250 -3 -1,100 -11 -14
3 years -150 -2 - - -2
4 years -100 -1 - - -1
5 years and
forward - - - - -
Total -1,972 -21 -1,972 -20 -41
NOTE 41, CONT.
FINANCIAL INFORMATION > NOTES
SAAB ANNUAL REPORT 2011 123