GROUPAMA / 2019 Universal Registration Document

6 EARNINGS AND FINANCIAL POSITION Cash and Group financing

6.4

CASH AND GROUP FINANCING

6.4.1

CASH AND CASH EQUIVALENTS

6.4.2

ISSUER’S FINANCING

STRUCTURE

Cash and cash equivalents totalled €393 million at 31 December 2019, down €206 million compared with 31 December 2018. The distribution of cash flows for fiscal year 2019 among the various businesslines is as follows: Operational businesscash flows: -€453 million; ● Investment, financial, and other business cash flows: ● €247 million; Total: -€206 million. ●

On 16 September 2019, Groupama issued and placed subordinated instruments with a maturity of 10 years with institutional investors for a total of €500 million with an annual couponof 2.125%. This operation contributes to the active management of Groupama’scapital. It aims to extend the maturityof its debt profile and strengthen theGroup’s financial flexibility. Debt totalled €1.630 billion at year-end 2019 for Groupama Assurances Mutuelles. Subordinatedliabilitiesat 31 December2019 totalled€1.630 billion, €0.003 billion lower thanat 31 December 2018. The Group’s debt ratio is assessed at the combined scope level (ratio now calculatedaccordingto the methodchosenby our rating agency) and was 27.2%at the end of 2019, comparedwith 28.4% at 31 December 2018.

31.12.2019

31.12.2018

<1 year 1–5 years >5 years

Total

<1 year 1–5 years >5 years

Total

(in millions ofeuros)

Subordinateddebt of insurancecompanies

1,630 1,630

1,633 1,633

Financingdebt representedby securities Financingdebt with banking-sectorcompanies TOTALFINANCINGDEBT

1,630 1,630

1,633 1,633

The “Subordinateddebt” line comprisesthree issues of bond loans as follows: The first bond was issued in the form of redeemablesubordinated instruments (TSR) in January 2017 through a swap for a nominal amount of €650 million. This 10-yearbond hasa fixed annualrate of 6% for 10 years. At 31 December2019, this issue was quotedat 127.2%compared with 111.2%at 31 December2018. The second bond was issued in the form of redeemable subordinated instruments (TSR) in September 2018for a nominal amount of €500 million. This 10-yearbond hasa fixed annualrate of 3.375% for 10 years. At 31 December2019, this issue was quotedat 110.5%compared with 92.3% at 31 December 2018. The third bond corresponds to the new instrument issued in the form of redeemable subordinated instruments (TSR) in September 2019 for a nominal amount of €500 million. This 10-yearbond hasa fixed annualrate of 2.125% for 10 years.

On 31 December2019, this issue was tradingat 100.5%. 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 in the income statement. In addition,under IFRS, one subordinatedinstrumentis 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-termsubordinatedbond (TSDI) fora total nominal amountof €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 2019, this TSDI was trading at 118.8%, compared with 104.6% on 31 December 2018.

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES