registration document France Telecom 2009 - Orange.com

20 NOTES
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
TO THE ANNUAL FINANCIAL STATEMENTS OF FRANCE TELECOM S.A.
Amounts available
(in millions of euros)
Amounts drawn
(in millions of euros)
Maturity
Authorized overdraft facilities 150 -
Syndicated credit line (1) 8,000 - June 20, 2012
Credit facilities at the year end 8,150 -
Marketable securities and cash 2,443 -
Bank overdrafts (7) -
TOTAL LIQUIDITY POSITION AT THE YEAR END 10,586 -
(1) The 8 billion euro multi-currency syndicated credit line was obtained by France Telecom S.A. on June 20, 2005. It is not subject to any specifi c covenants in terms of fi nancial ratios.
France Telecom ’s debt ratings
At December 31, 2009, France Telecom ’s debt ratings were as follows:
Standard & Poors Moody’s Fitch IBCA
Long-term debt A- A3 A-
Outlook Stable Stable Stable
Short-term debt A2 P2 F2
On July 6, 2009, the Fitch agency indicated that it was revising
its rating of short-term debt to F2 to bring this into line with
that of France Telecom ’s European peers, rather than to refl ect
any deterioration of the Group’s fundamental credit-worthiness.
Other ratings have been unchanged since June 23, 2005.
A portion of the debt (4.7 billion euros of the outstanding
balance at December 31, 2009) is subject to step-up clauses.
This amount does not include the TDIRA, whose step-up
clauses are described in Note 6.2.
As France Telecom ’s long-term ratings did not change in 2009,
the step-up clauses were not triggered.
6.5.4 Management of covenants
Commitments with regard to financial ratios
France Telecom S.A. has no credit lines or loans subject to
specifi c covenants with regard to fi nancial ratios.
As regards structured fi nancing contracts, several refund
scenarii are possible for France Telecom S.A.’s trade receivables
securitization programs: (i) standard repayment scenarios on
the contractual maturity date of the programs; (ii) accelerated or
adjusted payment, notably in the event that France Telecom ’s
long-term rating is downgraded to BB- or Ba3. In the case of
accelerated or adjusted payment, the securitization conduits
cease to participate in fi nancing new receivables, and cash
received on receivables previously sold is used to repay holders
of benefi cial interests progressively.
There is also one fi nal type of payment in securitized receivable
programs: forced repayment in the event that a treaty, a
legislative or regulatory action, an instruction or directive
issued by an offi cial body or a banking organization, or an
interpretation or application of the above by an offi cial authority
or organization with the appropriate powers challenged, or was
likely to challenge one of the legal and/or fi nancial mechanisms
of the securitization program.
Covenants with regard to events of default or material
adverse changes
Most of France Telecom S.A.’s fi nancing agreements, including
in particular the 8 billion euro syndicated credit facility set up
on June 20, 2005, as well as the bonds issued within the
scope of the EMTN program, are not subject to cross default
or prepayment measures in the event of a material adverse
change. When such clauses exist, accelerated repayment
clauses stipulate that default on a given contract does not
automatically lead to the accelerated repayment of all other
contracts.
6.5.5 Credit Risk Management
France Telecom considers that it has an extremely limited
exposure to concentrations of credit risk with respect to trade
accounts receivable due to its large and diverse customer
base (residential, professional and large business customers)
operating in numerous industries and located in many French
regions and countries. In addition, the maximum value of the
credit risk on these fi nancial assets is equal to their recognized
net book value.
France Telecom S.A’s policy is to invest its cash and cash
equivalents and marketable securities with fi nancial institutions
and industrial groups with a long-term rating of A-/A3 or above.
France Telecom enters into interest rate and foreign exchange
contracts with leading fi nancial institutions. France Telecom also
has collateralization agreements with the main counterparties
to which it has the highest exposures. France Telecom believes
that the risk of these counterparties defaulting is extremely low,
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM