EURAZEO_REGISTRATION_DOCUMENT_2017

3 GOVERNANCE

Risk management, internal control and main risk factors

Other financial risks 3.4.2.9 Interest-rate risk 3.4.2.9.1

loans. The Group has a policy of managing its interest-rate risk by combining fixed- and floating-rate loans, benefiting in part from interest-rate hedges. The value of certain of Eurazeo’s assets and notably real estate assets (Patrimoine division) is also exposed to an

The exposure of Eurazeo and its consolidated investments to increase in interest rates. interest-rate risk mainly concerns medium- and long-term floating-rate

As of December 31, 2017, borrowings (see Note 9.1 to the consolidated financial statements) broke down as follows:

Floating rate

12/31/2017

Fixed rate

Hedged Not hedged

Debt maturity

(In millions of euros)

Other debt and interest

70.5 70.5 158.7

70.5 70.5 38.6

-

-

2022

Holding company sub-total

0.0

0.0

CIFA Assets CIFA 4 Assets

Finance lease Finance lease

120.1

-

2027 2029 2023 2021

7.5

-

-

7.5

Grape Hospitality

Loan

336.9

6.7 1.3

308.9

21.3

Other debt and interest

1.3

-

-

Eurazeo Patrimoine sub-total

504.5

46.6

429.0

28.9

Asmodee

Bond issues

1.6

- -

-

1.6

2018 2021

Loans

223.5

217.6

6.0

Other debt and interest

18.3

17.2

- - -

1.1

2018-2023 2018-2022

Fintrax

Loans

388.5

- - - -

388.5

Other debt and interest

13.4

13.4 21.7 5.2 12.1 44.0

2019 2024

Iberchem Novacap

Loans Loans

120.7 650.2 46.7 141.5 83.4 343.5

99.0

645.0

2018-2023

Other debt and interest

34.6

-

2025 2023 2022 2024 2022

Sommet Education

Loans

-

97.4

Other debt and interest

83.4

-

-

Loans

-

150.1

193.4

Other debt and interest

0.9

0.9

-

-

Eurazeo Capital sub-total

2,032.1

136.1

1,209.1

687.0

Loans

461.7 231.0

39.2 74.5 35.7

270.3 106.6

152.2 49.9

2024-2029 2026-2027 2018-2031

Bond issues

Other debt and interest

59.5

10.2

13.7

Eurazeo PME sub-total

752.2

149.3 402.5

387.1

215.8 931.6

TOTAL NET DEBT

3,359.3

2,025.2

Risks relating to the bank debt market 3.4.2.9.2 Eurazeo’s private equity business requires it to secure bank debt (i.e. leverage) to finance part of its acquisitions. In such cases, Eurazeo generally buys stakes through a holding company formed specially to house the investment, acquired through acquisition financing. Depending on fluctuations in bank debt markets which can retract occasionally, the Company may be required to adapt and adjust the means of financing its acquisitions. With regard to the financing already in place in older investments, and in view of the prevailing market conditions, teams work upstream at an early stage, depending on the project and financing maturities, to monitor the renegotiation of financing, the engineering of alternative financing sources and/or the preparation of exit timetables (initial public offerings, sale, etc.).

56% of total net debt is either hedged within the meaning of IFRS (by derivatives qualifying for hedge accounting) or at fixed rates and is without recourse against Eurazeo. Moreover, in accordance with IFRS 7, a sensitivity analysis of the impact of a change in interest rates (instant impact of a +/100 basis point shock along the entire yield curve, occurring on Day 1 of the fiscal year and remaining constant thereafter) is presented in Note 9.5.2 to the consolidated financial statements (p. 239). In order to limit exposure to interest rate fluctuations, hedging derivatives are generally used to hedge investment financing. As of December 31, 2017, out of total net debt of €3,359.3 million, over 72% of the nominal amount is at fixed rates or hedged by interest rate hedging derivatives. For accounting purposes, these derivatives do not always qualify for hedge accounting pursuant to IFRS.

198

2017 Registration document

Eurazeo