Epiroc’s financial risk management is centralized to benefit economies of scale, to ensure good internal control and to facilitate monitoring of risk.
The central treasury function is responsible for the Group’s borrowing, liquidity management, currency and interest rate risk management, and serves as an internal bank for the Group.
Debt is primarily raised by the parent company Epiroc AB and transferred to subsidiaries as internal loans or capital injections. Financing is also undertaken locally, in countries which there are legal restrictions preventing financing through Group companies.
In connection with the listing on June 18, 2018, the Group entered into bridge facility of SEK 6,000 million with a group of banks, of which SEK 5,000 million was utilized. In addition, Epiroc was granted a bilateral loan of EUR 100 million from the European Investment Bank, maturing in 2022. By end of December, SEK 4,000 million of the bridge facility has been refinanced through capital market borrowings of SEK 2,000 million, maturing in 2023 and a bilateral loan facility of SEK 2,000 million, maturing in 2023, with two one year extension options. The remaining part of the bridge facility, SEK 1,000 million, will be replaced in the beginning of 2019.
A revolving credit facility (RCF), of SEK 4,000 million, is available to be used for general corporate purposes and as a backup facility. The maturity is five years with the addition of two one-year extension options, exercisable at the first and secondary anniversary of the RCF, subject to the consent of the lenders. The facility was entered into by Bank of China, Citibank, Danske Bank, Deutsche Bank, Nordea, Skandinaviska Enskilda Banken, Standard Chartered Bank, and Svenska Handelsbanken. The Group also have a Swedish commercial paper program available, with a framework amount of SEK 2,000 million.
Epiroc EMTN programme
Epiroc has a €1,500,000,000 Euro Medium Term Note Programme.
Epiroc was assigned preliminary BBB+ credit rating from S&P Global Ratings on November 21, 2018. On December 5, 2018, Epiroc was assigned a BBB+ long-term issuer credit rating and a BBB+ rating to the SEK2 billion senior unsecured bonds that Epiroc issued on November 29, 2018.