C20. Long-term and short-term borrowings

Open-market financing programs

Telia Company’s open-market financing (excluding debt derivatives) entails the following programs.

Program

 

Characteristics

Limit

currency

Dec 31, 2016

Dec 31, 2015

Limit

Utilized

Interest rate type

Average

maturity

Limit

Utilized

Floating

Fixed

(in millions)

(years)

(in millions)

Telia Company AB

Euro Medium
Term Note (EMTN)

Uncommitted, International, Long-term

EUR

12,000

8,611

629

7,981

8.46

12,000

9,408

Telia Company AB

Euro Commercial Paper (ECP)

Uncommitted, International, Short-term

EUR

1,000

1,000

Telia Company AB

Flexible Term
Note (FTN)

Uncommitted, Swedish domestic, Short-term and long-term

SEK

8,000

12,000

Borrowings

Long-term and short-term borrowings were distributed as follows.

SEK in millions

Dec 31, 2016

Dec 31, 2015

Carrying value

Fair value

Carrying value

Fair value

Long-term borrowings

       

Open-market financing program borrowings in fair value hedge relationships

37,189

46,135

37,672

41,021

Interest rate swaps at fair value

37

37

627

627

of which designated as hedging instruments

18

18

591

591

of which held-for-trading

18

18

36

36

Cross currency interest rate swaps at fair value

2,648

2,648

1,694

1,694

of which hedging net investments

1,778

1,778

1,333

1,333

of which designated as hedging instruments

549

549

198

198

of which held-for-trading

320

320

164

164

Subtotal (see Fair value hierarchy levels – Note C25)

39,873

48,819

39,993

43,342

Open-market financing program borrowings at amortized cost

41,334

45,209

47,908

53,577

of which hedging net investments

32,444

35,182

29,820

34,809

Other borrowings at amortized cost

1,733

1,733

3,699

3,699

Subtotal (see Categories – Note C25)

82,940

95,761

91,600

100,618

Finance lease agreements

221

221

46

46

Total long-term borrowings

83,161

95,982

91,646

100,664

Short-term borrowings

       

Open-market financing program borrowings in fair value hedge relationships

7,486

7,551

Interest rate swaps designated as hedging instruments

43

43

Interest rate swaps held for trading

3

3

7

7

Cross currency interest rate swaps held-for trading

191

191

21

21

Subtotal (see Fair value hierarchy levels – Note C25)

7,679

7,744

72

72

Utilized bank overdraft and short-term credit facilities at amortized cost

0

0

9

9

Open-market financing program borrowings

2,258

2,265

5,627

5,648

of which hedging net investments

1,583

1,589

of which at amortized cost

2,258

2,265

4,043

4,059

Repurchase agreement liabilities

559

559

Other borrowings at amortized cost

801

801

3,623

3,623

Subtotal (see Categories – Note C25)

11,297

11,368

9,330

9,351

Finance lease agreements

10

10

7

7

Total short-term borrowings

11,307

11,378

9,337

9,358

The fair values of borrowings above relate to hierarchy level 2. For a description of valuation techniques, see Note C3 “Significant accounting principles,” section “Fair value estimation.”

Normally, borrowings by Telia Company denominated in foreign currencies are swapped into SEK. The exceptions typically include funds borrowed to finance the group’s international operations or selective hedging of net investments abroad. 

SEK in millions Dec 31, 2016 Dec 31, 2015
Nominal portfolio value 89,621 77,847
of which intended for overall management of the funding portfolio
structure and hence not included in hedge relationships

 

Note that the nominal amounts are outstanding absolute values. The net amounts are SEK 676 million (286).

Refer to Note C25 “Financial assets and liabilities by category and level” for more information on financial instruments classified by category/fair value hierarchy level and to Note C26 “Financial risk management” for information on maturities and management of liquidity risk, currency risk, interest rate risk and financing risk, respectively.