Market risk



Market risk Market risk corresponds to the risk that market price variations, such as exchange rates, interest rates and equity instrument prices, may affect the group’s income or the value of financial instruments held. The objective for the management of market risk is to manage and control exposure to market risk within acceptable limits, whilst optimising the profitability/risk ratio. Sensitivity analyses to interest rate risks and exchange risks are included in note 9 to the chapter 20 of the Registration document “Analysis of risks related to financial instruments”. Interest rate risk In addition to its operating cash flow, Aéroports de Paris has access to borrowing to fund its investment programme. In 2017, Aéroports de Paris redeemed a mature loan in Swiss Francs (CHF200 million). On 13 December 2017, Aéroports de Paris issued a ten-year bond at a rate of 1% for an amount of €500 million. At 31 December 2017, debt, excluding interest accrued and derivative financial instruments (liabilities) stood at €5,965 million and mainly consisted of bonds and bank loans. The majority of Aéroports de Paris’ exposure to interest rate risk derives from its financial indebtedness and to a lesser extent its portfolio of rates derivatives.

The Company has a limited interest rate exposure policy. Low rates have led the Company to retain most of its debt at a fixed rate. The variability of the debt is studied on a case-by-case basis. Exchange rate risk is currently marginal and handled at each operation, with the use of hedging being favoured.

The rates risk relating to the debt is managed by modulating the respective proportions of fixed rates and variable rates in line with market developments. The management of this risk depends on the putting in place or cancellation of interest rate operations (swaps). The group’s policy consists of managing its interest expense by using a combination of fixed-rate and variable-rate loans such that 50% to 100% of its debt is fixed rate. In line with this objective, the group puts in place interest rate swaps through which it exchanges, at specific intervals, the difference between the amount of interest at fixed rates and the amount of interest at variable rates, calculated on a nominal loan amount agreed between the parties. These swaps are assigned to loan hedging. As of 31 December 2017, after taking interest rate swaps into account, around 85% of the group’s debt was at fixed interest rates (86% in 2016). In general terms, the group has little exposure to currency risk (see note 9 to the chapter 20 of the Registration document “Analysis of risks related to financial instruments”). In order to reduce exposure to fluctuations in the value of the US dollar and in the values of currencies linked to it by a fixed exchange rate, the group has implemented, at the level of its ADP Ingénierie subsidiary, a hedging policy consisting of:  neutralising exchange rate risk to the greatest extent possible by reducing the balance of revenues and expenses in these currencies;  making partial forward sales of dollars for residual balances.

Exchange risk The main currencies in which transactions are denominated are the Euro and the US dollar, together with some Persian Gulf currencies linked to the American dollar at fixed parity, such as the Saudi riyal, the United Arab Emirates dirham and the Omani rial.



Made with FlippingBook Online newsletter