The questions
1. World economic growth remains slow. Has your company taken particular financial measures as a precaution against a prolonged downturn? What are they?
2. Most corporates finance themselves with a combination of loans, bonds and commercial paper. How do you decide on the mix that’s right for your company?
3. Many banks use credit derivatives to transfer their lending risk. How do you feel about banks doing this with your loans?
4. Corporate treasurers are being encouraged to place spare cash in money market funds rather than bank deposits. What is your view of this trend?
5. Has the overall service you get from banks improved, got worse or stayed the same over the past 12 months? What kind of further service improvements would you like to see?
1. We became more selective and conservative in our investment strategy, postponing some investments and disposing of non-core assets/activities, and tried to sustain our profitability by increasing our efficiency.
2. For strategic reasons, we are not rated so access to public markets is limited. Bank loans and syndicated facilities have been our preferred financing instruments. The right mix is always based on the overall cost of debt, the flexibility permitted and the way each instrument fits the objectives of the project/business to be financed.
3. We have no objections in principle, as long as our relationship with our credit providers is not affected, confidentiality issues are preserved and no increased costs result from such transfer. We believe that such transfer should be disclosed to the borrower.
4. This is not a concern for us. We use excess cash to finance our investments and/or to repay existing facilities. We always try to weight the benefits of increased yields against the risk of our investments.
5. Overall, services are slightly improved although this varies from bank to bank and from service to service. In our case, and in Portugal, improvements in electronic bank communication with a single industry platform would be greatly welcomed.
