Annual Report - VÚB banka

12. Held-to-maturity investments
2007 2006
State restructuring bonds 35,065 35,072
State bonds 47,134 42,947
Bank bonds and other bonds issued by fi nancial sector 7,270 7,276
Corporate notes and bonds 1,272 1,309
90,741 86,604
Impairment losses (note 11) (20) (24)
90,721 86,580
38
State restructuring bonds
As part of the pre-privatisation restructuring process
of the Bank, the Slovak government decided
to transfer the receivables of the Bank arising from
non-performing loans to state agencies. These special
purpose agencies were created and are under
the full control of the state. In December 1999 and
June 2000, the Slovak government recapitalized
the Bank by transferring the non-performing loans,
including principal and interest, to Konsolidačná
banka Bratislava (‘KBB’) with a gross value of Sk
58.6 billion, and Slovenská konsolidačná (‘SKO’)
with a gross value of Sk 7.6 billion, which gave
rise to the Bank’s receivables from KBB and SKO
in the total amount of Sk 66.2 billion. In January
and March 2001, these receivables were swapped
at par for state restructuring bonds with a total nominal
value of Sk 66.2 billion.
Restructuring bonds were issued by the Ministry
of Finance of the Slovak Republic, acting on behalf
of the Slovak government as the fi nancial intermediary.
The bonds are legally considered to represent
sovereign and unconditional direct obligations of
the Slovak Republic and therefore there is no need
for additional state guarantees. The bond conditions
are the same as for any other similar type
of securities issued by the Slovak Republic, i.e. are
fully redeemable by the Slovak Republic, there is
no clause regarding rollover, early or late extinguishments
and do not allow for conversion into any
other type of fi nancial instruments.
At 31 December 2007 and 2006, the Group held
in its portfolio the following state restructuring
bonds:
(a) 7-year state bonds with a nominal value of Sk
11,300 million, due on 30 January 2008, bearing
variable interest rate of 6M BRIBOR;
(b) 10-year state bonds with a nominal value of Sk
11,044 million, due on 30 January 2011, bearing
variable interest rate for 6M BRIBOR;
(c) 7-year state bonds with a nominal value of Sk
4,700 million, due on 29 March 2008, bearing variable
interest rate of 6M BRIBOR;
(d) 10-year state bonds with a nominal value of Sk
7,497 million, due on 29 March 2011, bearing variable
interest rate of 6M BRIBOR.
The 7-year state restructuring bond with a nominal
value of Sk 11,300 million was fully repaid on
30 January 2008.
Annual Report 2007