Annual Report 2010 - SBM Offshore

Credit risk
Credit risk is the risk of financial loss to the Company
if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises
principally from the Company’s other financial assets,
trade and other receivables (including committed transactions),
derivative financial instruments and cash and
cash equivalents.
Rating 2010 2009
in thousands of US$ Assets Liabilities Assets Liabilities
AAA 11,015 34,096 5,722 42,101
AA+ - - - -
AA 40,585 37,776 6,331 13,814
AA- 4,338 3,827 2,416 4,507
A+ 64,526 104,783 26,182 80,694
A 2,010 11,063 880 6,143
BBB+ - - - -
BBB - 4,930 - 14,723
BBB- - - 9,959 10,138
Other and intercompany 4,095 - 9,616 -
Derivative financial instruments 126,569 196,475 61,106 172,120
AAA 15 - 17,301 -
AA+ 2,242 2,242 - -
AA 17,607 - 29,694 -
AA- 6,261 - 15,474 -
A+ 46,233 4,985 61,539 -
A 11,013 - 14,187 -
A- 57 - 86 -
BBB 121 - 1,862 -
BBB- 13,482 - 3,133 -
BB- - - - -
B+ 1,991 - 1,052 -
Other 11,626 - 2,384 -
Cash and cash equivalents and bank
overdrafts 110,648 7,227 146,712 -
It is Company policy to limit cash invested per counterparty
as follows: A rating US$ 10.0 million, AA rating
US$ 50 million and AAA rating US$ 100 million. Cash
held in BBB- is mainly held in primary banks in Brazil
and Angola.
For trade debtors the credit quality of each customer is
assessed, taking into account its financial position, past
experience and other factors. Individual risk limits are
Financial Review / Financial Statements 2010
set based on internal or external ratings in accordance
with limits set by the Board of Management. At balance
sheet date there were no individual customers that
have outstanding balances with a percentage over 10%
of the total of trade and other receivables. Reference is
made to note 15 - Trade and Other receivables for information
on the distribution of the receivables by country
and an analysis of the ageing of the receivables.
SBM Offshore – Annual Report 2010 169