Beyond business risks, Scania is exposed to various financial risks. Those that are of the greatest importance are currency, interest rate, refinancing and credit risks.
Especially in Scania’s Financial Services, access to competitive funding is critical and to a large extent dependent on Scania’s credit rating on the financial markets. As a consequence of Scania being a wholly owned subsidiary of the Volkswagen Group, Scania is also affected by changes in credit ratings for Volkswagen. The rating institute Standard & Poor’s considers Volkswagen’s ownership of Scania to be ‘Highly Strategic’ rather than ‘Core’ and their ratings methodology therefore dictates that Scania’s issuer credit rating shall be limited to the higher of (i) its stand-alone credit rating and (ii) a rating corresponding to one notch lower than Volkswagen’s. Scania’s issuer credit rating can never be higher than Volkswagen’s. Any downgrade by Standard & Poor’s of Volkswagen’s credit rating therefore may result in a downgrade by Standard & Poor’s of Scania’s issuer credit rating. Financial risks are managed in accordance with the Financial Policy adopted annually by Scania’s Board of Directors.
See also note 27 in The Scania Report 2017?