Description of risk
Financing risk is the risk that Billerud will have difficulty raising new loans. Access to further financing will be affected by a number of factors, including market conditions, the general availability of credit and Billerud’s creditworthiness and credit capacity. In addition, access to further financing will be affected by any negative perceptions that customers, suppliers or lenders may acquire about Billerud’s long and mediumterm financial prospects. Disruptions and uncertainty in the capital and credit markets may also limit availability to the capital needed to operate the business.
Risk management
To ensure that the Group always has access to external financing, the finance department must ensure that short and long-term credit commitments are available. Maximum cost-efficiency within established limits shall be the goal.
The lender base shall also be reasonably diversified to avoid excessive dependency on individual sources of financing. The repayment structure for loans shall be arranged such that the loan maturity in any particular year is evenly spread over a period.
Comments on 2010
In 2010, a new seven-year credit facility for SEK 800 million, maturing in 2017, was raised with AB Svensk Exportkredit. At 31 December 2010, outstanding bond loans totalled SEK 825 million. In addition, the credit limit for the syndicated credit facility maturing in 2012, which raised with a consortium of banks, was reduced, from SEK 1 800 million, to SEK 1 200 million. See note 20 in the 2010 Annual Report for more information.
Billerud’s net debt amounted to SEK 155 million at 31 December 2010, down SEK 997 million from 31 December 2009. The decrease was chiefly attributable to improved cash flow.