Ericsson carries a significant cash and net cash position to balance operational volatility and secure financial flexibility.
In addition to a robust cash position, the funding strategy is built on the following principles:
- primarily central funding raised by the parent company Telefonaktiebolaget LM Ericsson
- senior unsecured funding
- diversified funding sources, EMTN program, SEC registered program, domestic commercial paper program and bank funding
- debt should primarily be long-term with a smooth maturity profile to reduce refinancing risk
- maintain a stable investment grade rating to secure access to the market at attractive terms and conditions
- the major part of the funding is provided by issuance under the EMTN program and SEC registered program
- bank capacity is primarily allocated towards back-up facilities, local funding and trade related products (incl. vendor financing)
- close and strong bank relationships with a limited number of core relationship banks
- funding is raised in currencies offering liquidity and attractive terms, FX exposure is dealt with separately as a part of overall centralized FX exposure management
- debt is normally swapped to floating interest rates to match financial assets.