Rigorous management

Relying on bond financing

Since 2001 SAGESS’ financial policy, both reactive and protective, is characterized by a practice little used by the other central stocking entities in Europe: regular issuing of bonds through financial markets which guarantees financial stability in the long run:

  • 14 bonds issued since 2001,
  • last bonds issued :
    • January 2016 : 600 M€ over 7 years
    • October 2016 : 600 M€ over 12 years
  • bonds outstanding amount :
    • December 31, 2017 : 4 600 M€
    • December 31, 2018 : 4 100 M€

This financing mode is particularly adapted to the long term management objectives making it less dependent with respect on traditional means of financing. The October 2008 crisis showed that the actual occurence of a complete withdrawal from banks can happen. Other advantages are:

  • long term financing at lower costs (100% of bonds with fixed rate mainly swapped in fluctuating rate),
  • controlled management of maturity SAGESS debts aligned with financing plans,
  • exposure to national and international investors.

The maturity of bonds is spread out between 2019 and 2028. The debt maturity were spreaded and extended during the last issuances. The objective of SAGESS’ financial strategy is to continue managing the maturation of its bonds.

A proactive management strategy on financial risks

bond issuesTo guarantee responsible management for financial risks, SAGESS plans ahead. SAGESS is financed quasi completely by loans. To minimize liquidity exposures, a significant proportion of medium and long term resources is permanently maintained and the maturity of various debts are staggered (set-up on an undrawn revolving credit facility, creation of a strong and supportive ibank pool).

Moreover, the financial policy is based on financing at fluctuating rates given the low sensitivity of rates to oil reserves and absence of profitability of fix long term rates over the long run.

All operations are traded in euros to avoid exchange rate risks.

Any operation on derivative products must receive prior approval from the Board of Directors.

Finally, aspects on risks and insurances are given special attention. A complete review is periodically undertaken to identify and analyze risks to which SAGESS is exposed both in terms of quality (nature) and quantity (amount and probability). Insurance guarantees are also reviewed, adapted and optimized accordingly. SAGESS’ insurance coverage is wide and covers many types of damages, whatever the cause to its assets, damages to third parties and to employees, fraud and cyber-security.