Secured financing

SAGESS’ system of securing the financing for strategic oil reserves contributes to its balance sheet. SAGESS assets primarily consist of oil products bought and maintained at the disposal of the State. These assets are booked at their acquisition value (dedicated tax code provision), and are not exposed to price fluctuations in the oil market. In 2010 they amounted to 2.821 million €, that is 95% of all assets. In the case that SAGESS, following a government request, had to sell its assets on the market, a tax law provides SAGESS with the guarantee that it would at least recover its stocks acquisition price, protecting it from any risk of loss (the CPSSP would compensate SAGESS if the selling price were lower than acquisition cost). SAGESS is then protected against price fluctuations.

CPSSP, bonds, commercial papers: diversified financing

90% of SAGESS’ assets are financed by loans. To be financially stable, SAGESS diversifies its funding sources. Main financing sources are the CPSSP (for a total value of 3%), bonds (83%) and banks via commercial papers (14%). If bonds are attached to fixed rates and “swaped” at fluctuating rates, the commercial papers are short-term proof of SAGESS’ credit. With SAGESS’ excellent rating, commercial papers represent a funding source with lower costs for SAGESS and a financial process particularly appreciated by investors.