E4. Financial liabilities

AP Accounting principles

The main principle for recognition of SCA’s financial liabilities is that they are initially measured at fair value, net after transaction costs, and subsequently at amortized cost according to the effective interest method. Transaction costs are recognized on a straight-line basis over the term of the loan.

In cases where loans with fixed interest rates are hedged using derivatives, both the loan and the derivative are measured at fair value through a fair value hedge. Non-current loans that are subject to hedge accounting are discounted to the market interest rate without a credit spread. The cash flows from the interest rate derivative are discounted to the same market interest rate as the loan and the changes in value are recognized in the income statement.

Financial liabilities

SEKm

2016

2015

2014

1)

Accrued financial expenses have previously been specified in Note D6 Other liabilities.

2)

Fair value of short-term loans is estimated to be the same as the carrying amount.

Current financial liabilities

 

 

 

Amortization within one year

256

471

497

Bond issues

7,445

4,177

Derivatives

604

480

674

Loans with maturities of less than one year

4,400

3,950

9,292

Accrued financial expenses 1)

97

106

177

BS Total 2)

5,357

12,452

14,817

 

 

 

 

Non-current financial liabilities

 

 

 

Bond issues

18,708

14,725

14,646

Derivatives

23

123

31

Other long-term loans with maturities > 1 year < 5 years

8,139

3,162

5,447

Other long-term loans with maturities > 5 years

4,490

3,465

4,122

BS Total

31,360

21,475

24,246

Total financial liabilities

36,717

33,927

39,063

Fair value of financial liabilities

37,047

33,877

39,243

Borrowing

SCA has a Euro Medium Term Note (EMTN) program with a program amount of EUR 4,000m (SEK 38,233m) for issuing bonds in the European capital market. As of December 31, 2016, a nominal EUR 2,217m (2,441; 2,043) was outstanding with a remaining maturity of 4.8 years (4.1; 3.4).

Bond issues

Issued

Maturity

Carrying amount, SEKm

Fair value, SEKm

Notes SEK 600m

2019

603

602

Notes SEK 900m

2019

910

908

Green bond SEK 1,500m

2019

1,499

1,522

Notes EUR 300m

2020

2,895

2,871

Notes EUR 500m

2021

4,733

4,739

Notes EUR 500m

2023

5,157

5,269

Notes EUR 300m

2025

2,911

2,921

Total

 

18,708

18,832

SCA has a Swedish and a Belgian commercial paper program that can be utilized for current borrowing.

Commercial paper program 1)

Program size

Issued SEKm

1)

Included in Loans with maturities of less than one year in the Financial liabilities table.

Commercial paper SEK 15,000m

750

Commercial paper EUR 400m

909

Total

1,659

SCA has syndicated bank facilities to limit the refinancing risk and maintain a liquidity reserve. Contracted bilateral credit facilities with banks are used to supplement these syndicated bank facilities.

Credit facilities

 

Nominal

Maturity

Total SEKm

Utilized SEKm

Unutilized SEKm

Syndicated credit facilities

EUR 1,000m

2021

9,558

9,558

 

EUR 1,000m

2019

9,558

9,558

Bilateral credit facilities

SEK 48m

2017

48

48

Total

 

 

19,164

19,164

Maturity profile of gross debt1)

Maturity profile of gross debt (bar chart)Maturity profile of gross debt (bar chart)

1) Gross debt includes accrued interest in the amount of SEK 97m.

After additions for net pension provisions and deductions for cash and cash equivalents, interest-bearing receivables and capital investment shares, net debt amounted to SEK 35,361m (29,478; 35,947). For a description of the methods used by SCA to manage its refinancing risk, refer to chapter Risks and risk management.