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, domestic and international commercial paper programs and bank funding (commercial paper programs are currently not utilized)
debt should primarily be long-term with a smooth maturity profile to reduce refinancing risk
a strive towards 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
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.
