registration document France Telecom 2009 - Orange.com

financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
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NOTES TO THE ANNUAL FINANCIAL STATEMENTS OF FRANCE TELECOM S.A.
Management of fixed-rate/variable-rate debt
The fi xed-rate portion of France Telecom S.A.’s net fi nancial
debt after swaps fell from 102.35% at December 31, 2008 to
87.06% at December 31, 2009.
The table below shows the notional amounts of currencies to
be delivered and received under off-balance-sheet currency
instruments (currency swaps, forward currency transactions
and currency options) held by France Telecom S.A.
6.5.2 Currency Risk Management
France Telecom S.A. generally hedges its foreign currency
issues with derivatives or with assets in the same currency.
(in millions of euros)
In currency (1)
EUR USD JPY GBP PLN
Other currencies
in euro equivalent
value
Cross-currency swap lender legs 866 7,484 22,000 4,420 - 1,185
Cross-currency swap borrower legs (12,933) (600) - - - (427)
Currencies receivable under forward
currency contracts 715 2,062 - 1,821 34 225
Currencies payable under forward currency
contracts (3,634) (403) - (85) - (347)
Currency option receivable 66 86 - - - -
Currency option payable (58) (61) - - (100) -
TOTAL (14,978) 8,568 22,000 6,156 (66) 636
Translated into euros at the year-end
closing rate (2) (14,978) 5,947 165 6,931 (16) 636
(1) Positive amounts represent currencies receivable and negative amounts represent currencies deliverable.
(2) In euro equivalent value.
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6.5.3 Management of Liquidity Risk
France Telecom S.A.’s policy is that it must be able to meet its
upcoming loan repayments from available cash and credit lines
in place, without recourse to additional fi nancing, for at least the
next 12 months.
Diversified sources of financing
France Telecom S.A. has diversifi ed sources of fi nancing:
■ issuance in the short-term securities markets under the
treasury bill program;
■ regular issues in the bond markets under the EMTN (Euro
Medium-Term Note) program;
■ undrawn syndicated credit line of 8 billion euros, maturing in
June 2012.
In 2009, France Telecom S.A. took advantage of every market
window to prepare for refi nancing its bond redemptions:
■ January 2009 bond issue for 1 billion euros;
■ February 2009 bond issue for 500 million Swiss francs;
■ May 2009 bond issue for 750 pounds sterling;
■ July 2009 bond issue for 2.5 billion dollars in two tranches.
In 2009, France Telecom ’s fi ve-year Credit Default Swap had an
average spread of approximately 45 basis points.
Liquidity of investments
France Telecom S.A. invests its surplus cash in negotiable debt
securities, mutual funds and term deposits. As liquidity is the
main priority for these short-term investments, most of them are
invested for terms of less than three months.
Smoothing debt securities
Debt maturities are spread consistently over the next few years.
Credit line
At December 31, 2009, France Telecom S.A. had the following
credit facilities:
2009 REGISTRATION DOCUMENT / FRANCE TELECOM
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