2011 Annual report - touax group

Annual report 2011
The theoretical maturity dates in 2011 are presented below:
(€ millions)
Repayment of medium/long-term credit 66.2
Repayment of confirmed short-term credit with recourse 1.3
Repayment of confirmed short-term credit without recourse 22.4
Repayment of annual revolving credit 25.6
TOTAL 115.6
Estimated financial charges 20.0
TOTAL 135.6
At the end of December 2011, the Group's balance sheet
showed €44 million in cash and cash equivalents, over
€77 million in available lines of credit to meet its cash
requirements, and €69 million of assets in stock intended for
sale to investors.
The Group believes there is little risk of non-renewal of
its short-term credit lines reaching maturity, and notes that
the use of these revolving lines of credit depends on asset
pre-financing needs, and therefore on the Group's investments
or on temporarily including assets on its balance sheet.
The group refinanced the OBSAR which matured on March 8,
2012.
A liquidity risk may arise if the Group cannot use the renewable
credit facilities for financing assets due to its inability to meet
the eligibility criteria that are conditions for using the credit
lines.
In the longer term, the liquidity risk resides in inappropriate
matching of income generated by its leased assets with loan
maturities.
The timetable of dates when the Group’s debt falls due is as follows:
(€ millions) TOTAL 2012 2013 2014 2015 2016 + 5 years
Debts with recourse 265.7 93.5 26.6 26.9 21.9 69.6 27.2
Debts without recourse 98.4 22.8 34.1 7.6 4.1 10.5 19.43
TOTAL 364.1 116.3 60.7 34.5 26.0 80.1 46.5
In general the Group’s liquidity risk is limited, thanks to its
ability to sell or refinance its assets: The assets operated by the
Group are standardized and low-tech; they keep relatively high
residual values in a fairly liquid market.
The Group faces three major types of counterparty risks:
• cancellation of approved credit lines following the default of a
lender,
• counterparty default in the unwinding of an over-the-counter
derivative,
•non-repayment of cash surpluses invested in spot or futures
markets with a financial institution or as part of an investment.
The Group prefers financial relations with first-rate banks, i.e.
institutions with excellent credit ratings from international
credit rating agencies, for both renewable credit facilities and
over-the-counter trading of hedging derivatives.
The Group only invests its surpluses in non-dynamic monetary
investment products with first-rate banks in spot or futures
markets.
Thus the Group believes it has little exposure to counterparty
risk and does not use any derivatives to manage that risk.
➜ Interest-rate risk
The TOUAX Group relies on loans for both its development
requirements and its investment policy. A large share of its loans
apply a variable interest rate. Most of the Group's interest-rate
risk is related to its variable interest-rate loans.
In order to limit the negative impact of a rise in short-term rates,
the Group's policy is to not speculate in interest rates. It uses plain
vanilla derivatives, and negotiates new fixed-rate or variable rate
loans according to its decision to modify the fixed rate-variable
rate share of its debt.
In order to limit the use of market transactions, the Group also
strives to negotiate loans allowing modification of the indexing of
interest from variable to fixed rates.
In 2011, the Group did not use any new interest-rate derivatives,
since the hedging programme previously used, particularly in
2009, made it possible to maintain the fixed rate debt at 49% of
the overall long-term debt compared with 50% at the end of 2010.
Long term fixed-rate debt represented 73% of total long-term
debt, compared to 79% at the end of 2010.
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