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Corporate governance
Risk management
using the €5
billion commercial paper program on Euronext Paris,
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In November
2014, Carrefour Banque secured its refinancing sources
described in a prospectus filed with the Banque de France;
by rolling over its €750 million five-year syndicated line of credit and
negotiating two one-year extension options, one of which was
maintaining undrawn medium-term bank facilities that can be
●
exercised during the year, extending the facility’s maturity to
drawn down at any time according to the Group’s needs. At
November
2020. The Group therefore retains an option to extend it by
December
31, 2015, the Group had two undrawn syndicated lines
a further year.
of credit obtained from a pool of leading banks, for a total of
€3.9
billion. Group policy consists of keeping these facilities on
Interest-rate risk
stand-by to support the commercial paper program. The loan
agreements for the syndicated lines of credit include the usual
Interest rate risk is the risk of a change in interest rates leading to an
commitments and default clauses, including pari passu, negative
increase in the Group’s net borrowing costs. Detailed information on
pledge, change of control and cross-default clauses and a clause
interest-rate risk appears in Note
12.6.2 of the annex to the
restricting substantial sales of assets. They do not include any rating
Consolidated Financial Statements.
trigger, although they do allow for the pricing grid to be adjusted up
It is managed at headquarters level by Corporate Treasury and
or down to reflect changes in the long-term credit rating. None of
Financing, which reports monthly to an Interest Rate Risk Committee
the agreements contains a material adverse change clause.
responsible for recommending hedging strategies and methods to be
The Group considers that its liquidity position is strong. In addition, it
used to limit interest rate exposures and optimize borrowing costs.
had sufficient cash reserves at that date to meet its debt repayment
obligations in the coming year.
Long-term borrowings are generally at fixed rates of interest and do not
therefore give rise to any exposure to rising interest rates.
The Group’s debt profile is balanced, with no peak in refinancing needs
across the remaining life of bond debt, which averages four years and Various financial instruments are nonetheless used to hedge
four months.
borrowings against the risk of changes in interest rates. These are
mainly basic swaps and options. Hedge accounting is applied in all
Carrefour Banque’s liquidity risk is monitored within the framework of
cases where the required criteria are met.
a senior management-approved liquidity strategy that is part of the
Group’s overall strategy.
Variable rate long-term borrowings are hedged using financial
instruments that cap rises in interest rates over all or part of the life of
Carrefour Banque’s refinancing situation is assessed based on internal
the debt.
standards, early warning indicators and regulatory ratios.
Currency risk
Liquidity risk management objectives are to:
ensure that refinancing needs are met, based on monthly
●
Detailed information on foreign-exchange risk appears in Note
12.6.3
assessments of projected cash surpluses or shortfalls over a
of the annex to the Consolidated Financial Statements.
three-year period performed by comparing static forecasts of
committed financing facilities with dynamic lending forecasts;
Currency transaction risk
is the risk of an unfavorable change in
exchange rates having an adverse effect on cash flows from
gradually achieve compliance with the new Basel III liquidity
●
commercial transactions denominated in foreign currency.
coverage ratios, through a process that is designed to deliver a
sustainable improvement in asset quality by investing in a The Group conducts its international operations through subsidiaries
dedicated fund eligible for inclusion in the ratio calculation and that operate almost exclusively in their home country, such that
extending the maturity of liabilities in order to improve the net
purchases and sales are denominated in local currency. As a result, the
stable funding ratio;
Group’s exposure to currency risk on commercial transactions is
naturally limited and mainly concerns imported products. Currency
diversify refinancing sources to include bank lines of credit, bond
●
risks on import transactions (
i.e.
goods purchases billed in foreign
issues, securitization programs, money market issues and customer
currencies) covered by firm commitments are hedged by forward
deposits. During 2015, Carrefour Banque carried out two bond
purchases of the payment currency. Currency hedges are generally for
issues to support the financing and development of its businesses
periods of less than 12 months.
(Note 5.5.2 of the annex to the Consolidated Financial Statements).
The master trust structure allows Carrefour Banque to dynamically
Currency translation risk
is the risk of an unfavorable change in
manage asset-backed securities series issued by the securitization exchange rates reducing the value of the net assets of a subsidiary
fund. Within this structure, the €400 million serie was renewed for
whose functional currency is not the euro, after conversion into euros
a two year period, from June 2015.
for inclusion in the Group’s consolidated statement of financial
position.
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2015 REGISTRATION DOCUMENT