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. OTE has managed to have half of its loans on a floating basis based on a one-month or three-month Euribor. We are monitoring economic cycles before we decide to swap the rest of our loans to a floating basis.
2. We believe that we should spread out the maturity profile of our debt and have access to the syndicated bank loan market. Therefore, we believe that 10% to 15% should be on short-term financing while the rest is a fair mix between loans and bonds.
3. Banks’ use of credit derivatives has a positive and a negative aspect. By transferring the risk, they can assume bigger credit lines to the corporate; but credit derivatives allow the market to leverage so that in a downturn of the economy we could have a multiple negative effect.
4. We prefer to deposit our spare cash with banks with a good rating and forego the few extra basis points that a money market fund could offer. We expect our growth and returns via our business.
5. The service that we get from the banks has improved. In the future, we would like to see banks have a better understanding of our company and business.