Already at the time of the IPO (Initial Public Offering), Castellum established that the company should stand for low financial risk – which is currently expressed in terms of a loan-to-value ratio which shall not permanently exceed 50% and maintaining an interest coverage ratio of at least 200%.
Castellum’s financing strategy will support operations and manage the Group’s financial risks while promoting an open and transparent climate. Castellum’s financing strategy can be summarized in five cornerstones:
Diversification
Castellum shall aim for a diversified loan portfolio and avoid dependence on any specific counterparty or source of financing. Furthermore the financing’s maturity profile shall be well distributed over time.
Liquidity
Castellum shall have available unutilized credit facilities in order to respond rapidly to business needs and opportunities that arise.
Strength
The Group’s financial key ratios shall be strong, with a loan-to-value ratio not exceeding 50% and an interest coverage ratio of at least 200%.
Transparency
Castellum encourage long-term relationships with both banks and other lenders/investors and aim to be transparent in order to increase stakeholders understanding of the Group’s operations and, consequently, credit exposure.
Flexibility
Castellum shall have flexible financing for the purpose of supporting business developments regarding acquisitions, sales and project development. Our credit facilities shall provide us with high flexibility to utilize and repay with short notice without additional cost. Furthermore, Castellum’s financing shall be flexible, both in terms of pricing (fixed and floating) and maturities.
Castellum’s financial policy and commitments in credit agreements
| |
Policy |
Committment |
Outcome September 30, 2019 |
| Loan to value ratio |
Not exceeding 50% |
Not exceeding 65% |
44% |
| Interest coverage ratio |
At least 200% |
At least 150% |
505% |
| The share of secured borrowing/total assets |
|
Not exceeding 45% |
7% |
| Funding risk |
|
|
|
| – average capital tied up |
At least 2 years |
|
3.5 years |
| – proportion maturing within 1 year |
No more than 30% of outstanding loans and unutilized credit agreements |
|
12% |
| – average maturing credit price |
At least 1.5 years |
|
3.5 years |
| – liquidity reserve |
Secured credit agreements corresponding to MSEK 750 and 4.5 months upcoming loan maturities |
|
Achieved |
| Interest rate risk |
|
|
|
| – average interest duration |
1.5-3.5 years |
|
3.4 years |
| – proportion maturing within 6 months |
No more than 50% |
|
27% |
| Credit and counterparty risk |
|
|
|
| – rating restrictions |
Credit institutions with high ratings, at least S&P BBB+ |
|
Achieved |
| Currency risk |
|
|
|
| – translation exposure |
Shareholders equity is not hedged |
|
Not hedged |
| – transaction exposure |
Handled if exceeding MSEK 25 |
|
Under MSEK 25 |
