Liquidity risk is the risk that new financial resources may not be available (funding liquidity risk) or the Company may be unable to convert assets into cash on the market (asset liquidity risk), meaning that it cannot meet its payment commitments. This may affect profit or loss should the Company be obliged to incur extra costs to meet its commitments or, in extreme cases, lead to insolvency and threaten the Company’s future as a going concern.
Snam’s objective is to set up, as part of its Financial Plan, a financial structure (in terms of: the debt and RAB ratio, between short- and medium-term debt, fixed-rate and variable-rate debt and the bank credit granted and the bank credit used) which, in line with the business objectives, would guarantee an adequate level of liquidity for the Group, while minimising the relative opportunity cost and maintaining balance in terms of the duration and composition of the debt.
As shown in the paragraph “Interest rate risk,” when implementing the debt refinancing programme, the Company had access to a wide range of funding sources through the credit system and the capital markets (pool financing with major domestic and international banks, bilateral contracts and loan contracts with the reference shareholder CDP, bonds)44.
Snam’s objective is to gradually achieve a balanced debt structure, in terms of the composition of the bonds and the bank credit and the availability of usable committed bank credit lines, in line with its business profile and the regulatory environment in which Snam operates.