GROUPAMA / 2018 Registration document

6 EARNINGS AND FINANCIAL POSITION CASH AND GROUP FINANCING

CASH AND GROUP FINANCING 6.4

6.4.1

CASH AND CASH EQUIVALENTS

institutional investors for a total of €500 million with an annual coupon of3.375%. This operation contributes to the active management of Groupama’s capital. It aims to extend the maturity of its debt profile andstrengthen the Group’s financial flexibility. The debt of Groupama Assurances Mutuelles totalled €1,633 million at theend of 2018. Subordinated liabilities at 31 December 2018 totalled €1,633 million, €497 millionhigher thanat 31 December 2017. The Group’s debt ratio is assessed at the combined scope level (ratio now calculated according to the method chosen by our rating agency) and was 28.4% at the end of 2018, comparedwith 25.9% at31 December 2017.

Cash and cash equivalents totalled €599 million at 31 December 2018, up €154 millioncomparedwith 31 December 2017. The distribution of cash flows for fiscal year 2018 among the various business lines is asfollows: operational businesscash flows: €541 million; ❯ investment, financial, and other business cash flow: ❯ -€387 million; total: +€154 million. ❯

6.4.2

ISSUER’S FINANCING

STRUCTURE

On 17 September 2018, Groupama issued and placed subordinated instruments with a maturity of 10 years with

31.12.2018

31.12.2017

<1 year

1-5years >5 years

Total

<1 year

1-5years >5 years

Total

(in millions of euros)

Subordinated ebtof insurance companies

1,633

1,633

1,136

1,136

Financing debt represented by securities Financing debtwithbanking-sector companies

TOTAL FINANCING DEBT

1,633

1,633

1,136

1,136

The “Subordinateddebt” line comprisesthree issues of bond loans as follows: The first loan bond was issued by Groupama Assurances Mutuelles on 27 October 2009 in the form of redeemable subordinated instruments (TSR) for a nominal amount of €750 million. Following the swap completed in January 2017, the nominal value was reduced to €500 million. This 30-year bond has a fixed annual rate of 7.875% for the first 10 years. After that date, the rate applied will be the three-month Euribor plus amargin of 5.36%. It includes a “10-year call” that allows the issuer to redeem the bond early asfrom the tenth year. At 31 December 2018, this issue was quoted at 105.5% comparedwith 113.7%at 31 December 2017. The second bond was issued in the form of redeemable subordinated instruments (TSR) in January 2017 through a swap for a nominal amountof €650 million. This 10-year bond has a fixed annualrate of 6%for 10 years. At 31 December 2018, this issue was quoted at 111.2% comparedwith 126.3%at 31 December 2017. The third bond corresponds to the new instrument issued in the form of redeemable subordinated instruments (TSR) in September 2018for a nominal amount of€500 million.

This 10-year bond has a fixed annualrate of 3.375%for 10 years. On 31 December 2018, this issuewas trading at92.3%. In view of the conditions specific to these issues and pursuant to IAS 32 sections 16 and 17, these three bonds are considered as financial liabilities rather than equity instruments.They are therefore recognised under financing debt. Interest costs net of tax are recognised inthe incomestatement. In addition, under IFRS, one subordinated instrument is recorded in equity instruments and therefore does not appear in the tables above. This is a bond issued by Groupama Assurances Mutuelles on 28 May 2014 in the form of an indefinite-termsubordinated bond (TSDI) for a total nominalamount of€1.1 billion. This instrument was issued at a fixed rate of 6.375% for the first 10 years and then at a variable rate equal to the 3-month Euribor rate plus a margin of 5.77%. This bond includes a “10-year call” that allows the issuer to redeem the bond early as from the tenth year. On 31 December 2018, this TSDI was trading at 104.6%, comparedwith 120.5%on 31 December2017.

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES

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