Financing Methods and Strategies

Hydro-Québec has adopted an integrated debt-management policy. It has operated on nearly all the major fixed income securities markets: Canadian, American, European and Japanese.

The company has recourse to public bonds and private placements on these markets. Hydro-Québec issues medium-term notes in all markets and any currency. It also has a commercial paper program in Canadian and U.S. dollars.

Financing and debt management

OBJECTIVES	STRATEGIES
Maintain the presence and impact of Hydro-Québec on capital markets	Plan bond issuance—in particular, seriesmaturing in 2035, 2040, 2045 and 2050—in order to increase market liquidity. These long-term bonds are linked to the service life of our property, plant and equipment. Stagger debt maturities in order to maintain the annual financing program at a stable level. For the 2015–2019 period, Hydro-Québec has a certain leeway in terms of maturities—if the markets are not favorable for issuing the long-term portion, the company could issue shorter-term bonds without compromising the financing program for the following years. Focus on strategically important capital markets, in particular the Canadian bond market.
Diversify Hydro-Québec's funding sources while minimizing foreign exchange risk	Maintain access to foreign capital markets, particularly the U.S. dollar market. Use swaps to hedge financing in foreign currencies. Secure financing in the lowest cost market.
Manage Hydro-Québec's debt effectively	Redeem debt prior to maturity whenever such operations allow Hydro-Québec to reduce the cost of its debt.