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Debt financing

SSAB's funding is focused on supporting the Group’s strategy and covering the needs for financing within the framework of the Group's financial policy. The funding is primarily executed through the parent company. In order to minimize the refinancing risk, the objective is that the debt should have an even maturity profile. Short-term funding is primarily obtained through the commercial paper markets in Sweden and Finland. SSAB has a strong and supportive bank group providing committed back-stop facilities to secure the short-term funding and liquidity needs.  In order to secure access to competitively priced funding in the relevant markets, SSAB strives to be transparent and informative toward the investor community.



 

Key figures     Q3/2016 2015 2014 2013
Net debt SEK million 18,192 23,156
24,674 14,833
Net debt/equity ratio %  35 52 56 55
Average term on the loan portfolio years  5.2 4.6 3.9 4.1
Averaged fixed interest term years  0.9 1.1
1.2 0.9
Non-utilized credit facilities SEK million  7,493 8,308
8,714 7,319
Cash and cash equivalents SEK million  3,801 2,711
3,014 2,124

 

Cash flow, financing and liquidity (from Q3/2016 report)

Operating cash flow for the first three quarters of the year was SEK 2,154 (2,086) million. Cash flow was positively affected mainly by cash flow from earnings before depreciation and amortization, but was negatively impacted by a build-up of working capital mostly due to higher accounts receivable and higher inventories.

Net cash flow was SEK 5,938 (802) million. Net cash flow was affected, among other things, by proceeds of SEK 4,907 million from the rights issue and payments for strategic expenditures, including acquisitions of businesses and operations, of SEK 236 (543) million (total expenditure was SEK 924 (1,938) million). Net debt decreased by SEK 5,029 million during the first three quarters of the year and at September 30 amounted to SEK 18,192 million. The net debt/equity ratio was 35% (55%).

At September 30, the term to maturity of the total loan portfolio averaged 5.2 (4.8) years, with an average fixed interest period of 0.9 (1.3) years.

Cash and cash equivalents were SEK 3,801 (1,420) million and non-utilized credit facilities were SEK 7,493 (8,463) million (with an average term to maturity of 2.4 (2.1) years), which combined corresponds to 19% (17%) of sales over a rolling 12-month period. 

 

Debt structure on (at September 30, 2016)

 SSAB Debt structure on (at Sep 30, 2016)

 

 

Net debt and net debt/equity ratio (at September 30, 2016)

 SSAB Net debt and net debt/equity ratio (at Sep 30, 2016)

 

Debt maturity (at September 30, 2016)

 SSAB's Debt maturity (at Sep 30, 2016)

 

Debt cost and duration


 SSAB Debt cost and duration

 

Debt programs

SSAB’s funding is conducted primarily through the bank market and existing note and commercial paper programs. For borrowing for terms of up to ten years, a European Medium Term Note program (EMTN) is used, while Swedish and Finnish commercial paper programs are used for borrowing for shorter terms. The program limit of the EMTN program is EUR 2,000 million. The Swedish commercial paper program has a limit of SEK 5,000 million and the Finnish commercial paper program has a limit of EUR 500 million.

Main financial
arrangements 
Total
amount
European medium
Term Note
program (EMTN)
EUR 2,000
million
Swedish commercial
paper program
SEK 5,000
million
Finnish commercial
paper program
EUR 500
million

Related documents

EMTN Prospectus 2016

EMTN Prospectus 2015

EMTN Prospectus 2014

Prospectus Amendment

Swedish Commercial Paper Program


Credit ratings

Credit ratings are important for the Group to be able to secure competitively priced funding. The company aims at having at least one rating.
On May 19, 2016 Standard & Poor's confirmed its 'B+' long-term corporate credit rating on SSAB AB and the CreditWatch with negative implications,
where S&P placed it on Dec 21, 2015 was removed and replaced with stable outlook.

 

 

Standard & Poors' Ratings Direct, Research update 2016-06-08

Standard & Poors's Ratings Direct, Research Update 2016-02-22

Standard & Poors's RatingsDirect, Research Update 2015-12-21

Standard & Poor's RatingsDirect, Research Update 2015-05-29

Standard & Poor's RatingsDirect, Bulletin 2014-01-22

Standard & Poor's RatingsDirect, Research Update 2013-11-12