DEBT AND LIQUIDITY

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)31/12/201531/12/2014
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)31/12/201531/12/2014
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 valueBook valueAccrued interest expensesAverage weighted cost %Nominal valueBook valueAccrued interest expensesAverage 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  
 IssuancesRedemptionsIssuances net of redemptionsIssuancesRedemptionsIssuances 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

 CouponOutstanding (*)CurrencyAmortised cost(**)Issue dateCall dateMaturity
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

IssuerCouponOutstanding(*)CurrencyAmortised cost(**)Issue dateMaturity
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

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)31/12/201531/12/2014
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.