The goal of WACKER’s financing strategy is to ensure sustainable growth and stability for the Group. This strategy comprises both financing through our own resources and the use of debt instruments.

We satisfy our capital requirements with operating cash flow, and short-term and long-term financing.

We ensure the Group’s permanent solvency with rolling cash-flow management and sufficient contractually agreed lines of credit. Financing requirements are calculated for the entire Group, with funding usually being granted at the Group level. Project-specific or regional funding is available in special cases.

Financing Measures in 2014

The Group took several financing measures in 2014, enabling it to cover financing requirements for the coming years and to optimize loan maturities and term structures. In February 2014, Wacker Chemicals (China) Co. Ltd. concluded a long-term loan agreement with UniCredit Bank AG for CNY 400 million (€ 53 million) with a three-year draw period. This loan has been fully drawn.

In July 2014, Wacker Chemicals (Nanjing) Co. Ltd., Wacker Chemicals (Zhangjiagang) Co. Ltd. and Wacker Chemicals (China) Co. Ltd. concluded a loan agreement with Commerzbank totaling CNY 400 million with a maturity of three years. This loan was also drawn in four installments. Both CNY-denominated loans were used to repay existing loans. Wacker Chemie AG has provided a guarantee for both CNY loans.

In December 2014, WACKER prematurely refinanced a € 200 million syndicated loan due in July 2015 with a syndicated loan for the same amount with a maturity of five years and two extension options of one year each. This loan is currently not being utilized.

Financing Measures in 2014

In July 2014, WACKER completely drew down a loan for € 80 million concluded with the European Investment Bank in July 2013 for financing research and development costs at Siltronic.

The financing agreements concluded in 2014 contain standard market credit terms and, in the case of the syndicated loan, a net debt-to-EBITDA ratio as the only financial covenant.

For all the loans that we negotiate, we structure the agreements carefully to ensure that the financial partners are treated equally (pari passu) and that the agreements can subsequently be monitored groupwide. Some of the liabilities to banks are fixed-interest while others have variable interest rates. As of December 31, 2014, WACKER had unused lines of credit of around € 600 million with terms of over one year.

WACKER collaborates with a number of banks (core-bank principle), who must have an investment-grade credit rating and a long-term business model. To minimize counterparty and concentration risks, the share of any single bank in lines of credit committed to WACKER may not exceed 20 percent. The only exception is the European Investment Bank.