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, which are all the consolidated financial liabilities related to specific consolidated balance sheet items.  This category also includes liabilities related to investment contracts issued by insurance companies.

Liabilities linked to financing activities, including other consolidated financial liabilities, such as subordinated liabilities, bonds issued and other loans received. This category includes, for example, liabilities arising from operations carried out to acquire controlling interests.

Total liabilities were as follows:

(€ million) 31.12.2012 30.09.2012 31.12.2010
Liabilities linked to operating activities 50673 50471 46915
Liabilities linked to financing activities 13234 12514 12219
Subordinated liabilities 7833 6636 6611
Senior bonds 4464 4465 4460
Other non subordinated liabilities linked to financing activities 937 5878 5608
Total 63907 62985 59133

The weighted average cost of our financial debt as at 31 December 2012 amounted to 5.85%, compared to 5.63% as at 30 September 2012 and 5.37% as at 31 December 2011. The increase in the average cost of funding is attributable to the two subordinated bonds issued by Assicurazioni Generali S.p.A. during 2012. The weighted average cost reflects the annualized cost of the financial debt considering the outstanding debt at the reporting date and the related activities of currency and interest rate hedging.

Interest expenses on total liabilities are broken down as follows:

(€ million) 31.12.2012 31.12.2011 Variazione
Interest expense on liabilities linked to operating activities 624 586 6.4%
Interest expense on liabilities linked to financing activities 668 646 3.4%
Total(*) 1,291 1,232 4.8%

(*) Without taking into account the interest expenses on  liabilities linked of the  real estate development companies, classified among the other expenses, as well as the interest expenses on deposits under reinsurance business accepted, deducted from the related interest income.

Financial liabilities at fair value through profit or loss
  Financial liabilities held for trading Financial liabilities
designated as at fair value
through profit or loss
Total
(€ million) 31.12.2012 31.12.2011 31.12.2012 31.12.2011 31.12.2012 31.12.2011
Financial liabilities related to inv estment contracts issued by insurance companies 0 0 12,650 11,563 12,650 11,563
where the investment risk is borne by the policyholders 0 0 11,188 10,260 11,188 10,260
pension funds 0 0 1,414 1,080 1,414 1,080
other financial liabilities related to investment contracts 0 0 48 223 48 223
Derivatives 358 1,148 721 826 1,079 1,975
Other financial liabilities 0 0 796 1,002 796 1,002
Total 358 1,148 14,167 13,391 14,525 14,539
Other financial liabilities
(€ million) 31.12.2012 31.12.2011
Subordinated liabilities 7,833 6,611
Loans and bonds 16,669 15,699
Deposits received from reinsurers 1,077 984
Bonds 4,975 5,022
Other loans 4,643 4,623
Financial liabilities related to investment contracts issued by insurance companies 4,947 4,107
Hedging derivatives 1,028 963
Liabilities to banks or customers 24,880 22,285
Liabilities to banks 2,147 995
Liabilities to customers 22,733 21,289
Total 49,382 44,594

The table below summarizes the main subordinated issuances in the market and their features:

Issuer Coupon Outstanding(*) Currency Amortised cost(**) Issue date Call date Maturity
Generali Finance B.V. 5,32% 1275 EUR 1241 16/06/2006 16/06/2016 Perp
Generali Finance B.V. 6.21% 700 GBP 859 16/06/2006 16/06/2016 Perp
Assicurazioni Generali 6.27% 350 GBP 428 16/06/2006 16/06/2026 Perp
Generali Finance B.V. 5.48% 1250 EUR 920 08/02/2007 08/02/2017 Perp
Assicurazioni Generali 6.42% 495 GBP 604 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% 1250 EUR 1245 12/12/2012 12/12/2022 12/12/2042

(*) in currency million

(**) in € million



 

In this category are also classified subordinated liabilities issued by Assicurazioni Generali S.p.A. and other subsidiaries in the form of private placements. The unquoted private placements issued by Assicurazioni Generali S.p.A. for a nominal amount of € 1,500 million, are accounted for at a corresponding amortized cost of  € 1,483 million. The remaining subordinated liabilities are mainly issued by Generali France and BSI, respectively for a nominal amount of € 200 million and USD 100 million, for a total corresponding amortised cost of € 306 million.

The fair value of subordinated liabilities amounts to € 7,449 million.

The category of bonds includes some senior issues shown below:

Issuer Coupon Outstanding(*) Currency Amortised cost(**) Issue date Maturity
Generali Finance B.V. 4.75% 1500 EUR 1490 12/05/1999 12/05/2014
Generali Finance B.V. 3.88% 500 EUR 499 06/05/2005 06/05/2015
Assicurazioni Generali 4.88% 750 EUR 741 11/03/2009 11/11/2014
Assicurazioni Generali 5.13% 1750 EUR 1719 16/09/2009 16/09/2024

(*) in currency million

(**) in € million

 

Liabilities to banks and customers are mainly payable on demand or short term liabilities.
Other payables
 (€ million) 31.12.2012 31.12.2011
Payables arising out of direct insurance operations 3,314 3,578
Payables arising out of reinsurance operations 646 725
Other payables 4,073 3,303
Payables to employees 982 954
Provision for defined benefit plans (employee severance pay) 103 108
Payables to clients and suppliers 1,023 1,122
Social security 149 157
Other payables 1,817 962
Total 8,033 7,607
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Financial debt schedule68.66 KB