DEBT AND LIQUIDITY | Generali Financial Report 2015

Access key	Command / page
H	Home page
S	Search
M	Sitemap
K	English version
L	Italian version
P	Print page
A	Send to a friend
R	Change font size
1	Press releases
2	Financial figures
3	Financial calendar
4	The Generali stock
5	Contact us
6	Send your CV

Access key	Command / page
H	Home page
S	Search
M	Sitemap
K	Versione in inglese
L	Versione in italiano
P	Stampa la pagina
A	Invia ad un amico
R	Cambia dim. carattere
1	Comunicati stampa
2	Risultati finanziari
3	Calendario finanziario
4	Generali in borsa
5	Contattaci
6	Invia il tuo CV

Debt

In accordance with the IAS / IFRS managerial model used by the Generali Group, consolidated liabilities were split into two categories:

liabilities linked to operating activities, defined as all the consolidated financial liabilities related to specific balance sheet items from the consolidated financial statements. This category also includes liabilities stated by the insurance companies against investment contracts and liabilities to banks and customers of banks belonging to the Group;
liabilities linked to financing activities, including the other consolidated financial liabilities, including subordinated liabilities, bonds issued and other loans obtained. This category includes liabilities incurred in connection with a purchase of controlling interests.

Group debt

(€ million)	31/12/2015	31/12/2014
Liabilities linked to operating activites	36,787	36,541
Liabilities linked to financing activities	13,117	12,253
Subordinated liabilities	9,643	8,315
Senior bonds	2,992	3,477
Other non subordinated liabilities linked to financing activities	482	460
Total	49,904	48,794

In accordance with Group strategy which requires the senior debt and subordinate debt to be rebalanced in favour of subordinate debt, and prudent advance refinancing policies, the net increase in liabilities linked to financing activities compared to 31 December 2014 is mainly due to the following transactions:

repayment of € 500 million on a senior bond in May 2015;n
new issue of a subordinated debt for € 1,250 million in October 2015 by Assicurazioni Generali, in order to refinance the Group bonds with early repayment options for June 2016.

The weighted average cost of liabilities linked to financing activities at 31 December 2015 amounted to 5.65%, substantially unchanged to the 5.62% at 31 December 2014 and the 5.67% at 30 September 2015. The weighted average cost reflects the annualized average cost of the debt considering the outstanding liabilities at the reporting date and the related currency and interest rate hedging.

Interest expenses on total liabilities are detailed below:

Interest expenses

(€ million)	31/12/2015	31/12/2014
Interest expense on liabilities linked to operating activities	411	518
Interest expense on liabilities linked to financing activities	684	741
Total	1,094	1,260

Details on the liabilities linked to financing activities

Details of subordinated liabilities and senior bonds

(€ million)	31/12/2015				31/12/2014
	Nominal value	Book value	Accrued interest expenses	Average weighted cost %	Nominal value	Book value	Accrued interest expenses	Average weighted cost %
Subordinated liabilities	9,681	9,643	551	6.13%	8,356	8,315	541	6.21%
Senior bonds	3,009	2,992	132	4.17%	3,508	3,477	200	4.13%
Total	12,690	12,635	n.a.	n.a.	11,864	11,792	0	0

^* The weighted average cost reflects annualized cost of financial debt considering the outstanding debt at the reporting date and the related activities of currency and interest rate hedging.

Details of issues and redemptions of subordinated liabilities and senior bonds

(€ million)	31/12/2015			31/12/2014
	Issuances	Redemptions	Issuances net of redemptions	Issuances	Redemptions	Issuances net of redemptions
Subordinated liabilities	1,250	0	1,250	2,500	1,858	642
Senior bonds	0	500	-500	1,250	2,250	-1,000
Total	1,250	500	750	3,750	4,108	0

Details on principal issues

Subordinated liabilities

	Coupon	Outstanding (*)	Currency	Amortised cost(**)	Issue date	Call date	Maturity
Generali Finance B.V.	5.32%	752	EUR	740	16/06/2006	16/06/2016	Perp
Generali Finance B.V.	6.21%	345	GBP	467	16/06/2006	16/06/2016	Perp
Assicurazioni Generali	6.27%	350	GBP	472	16/06/2006	16/06/2026	Perp
Generali Finance B.V.	5.48%	869	EUR	710	08/02/2007	08/02/2017	Perp
Assicurazioni Generali	6.42%	495	GBP	667	08/02/2007	08/02/2022	Perp
Assicurazioni Generali	10.13%	750	EUR	747	10/07/2012	10/07/2022	10/07/2042
Assicurazioni Generali	7.75%	1,250	EUR	1,246	12/12/2012	12/12/2022	12/12/2042
Assicurazioni Generali	4.13%	1,000	EUR	988	02/04/2014	na	04/05/2026
Generali Finance B.V.	4.60%	1,500	EUR	1,340	21/11/2014	21/11/2025	Perp
Assicurazioni Generali	5.50%	1,250	EUR	1,241	27/10/2015	27/10/2027	27/10/2047

(*) in currency million.

(**) in € million.

This category also includes unlisted subordinated liabilities issued by Assicurazioni Generali S.p.A. and other subsidiaries. Liabilities issued by Assicurazioni Generali S.p.A. in the form of private placements amounted to a nominal amount of € 1,000 million corresponding to an amortized cost of € 997 million. The remaining subordinated liabilities relate to shares issued by subsidiaries in Austria with an amortized cost of about € 28 million.

A subordinated bond was issued in October 2015 for a total amount of € 1,250 million in order to refinance the 2016 call dates on a number of subordinated bonds issued by the Group.

Senior bonds

Main senior bonds issues

Issuer	Coupon	Outstanding(*)	Currency	Amortised cost(**)	Issue date	Maturity
Assicurazioni Generali	5.13%	1,750	EUR	1,724	16/09/2009	16/09/2024
Assicurazioni Generali	2.88%	1,250	EUR	1,244	14/01/2014	14/01/2020

(*) in currency million.

(**) in € million.

This category also includes the other bonds, and mainly including those issued by the subsidiary Ceska Pojistovna for a nominal amount of CZK 500 million. The corresponding amortized cost amounts to about € 24.6 million. The Group repaid € 500 million on a senior bond in May 2015.

Maturity of the financial debt

The average duration at 31 December 2015 was 6.68 years compared to 6.87 years at 31 December 2014. The change in the average duration is a direct result of the re-fi nancing operations and the capital optimization operation described above.

Lines of credit

As in established market practice for the sector, Assicurazioni Generali has a number of bilateral revolving credit lines, renewed in May 2015. The new lines with a total maximum amount of € 2 billion were renegotiated, with expiries being extended from 3 to 5 years. The counterparties are major fi nancial institutions of high international standing. This will only impact the Group’s fi nancial liabilities if the facility is drawn down, and will allow Generali to improve fi nancial fl exibility to manage future cash requirements in a volatile environment.

LIQUIDITA’

Disponibilità liquide e mezzi equivalenti

(in milioni di euro)	31/12/2015	31/12/2014
Depositi bancari e titoli a breve termine	8.792	8.34
Cassa e disponibilità liquide equivalenti	211	154
Cassa e disponibilità presso banche centrali	41	14
Quote di fondi di investimento monetari	5.527	2.158
Altre disponibilità liquide	-803	-443
Disponibilità liquide e mezzi equivalenti	13.768	10.223

La liquidità registra un incremento attestandosi a 13.768 milioni a causa principalmente per i flussi di cassa derivanti dalla nuova produzione assicurativa - che prudentemente non sono stati immediatamente reinvestiti a causa delle volatili condizioni di mercato manifestatesi in particolare alla fine del 2015 - nonché dalla liquidità generata dalla nuova emissione obbligazionaria finalizzata al rifinanziamento dell’emissione subordinata callable a giugno 2016.