Annual Report 2010 - Enel.com

Current portion of long-term loans
Millions of euro Carrying amount
Bonds:
at Dec. 31,
2010
at Dec. 31,
2009 2010-2009
- fixed rate 1,191 584 607
- floating rate 663 512 151
Total 1,854 1,096 758
Bank loans:
- fixed rate 33 66 (33)
- floating rate 916 1,372 (456)
Total 949 1,438 (489)
Non-bank loans:
- fixed rate 74 226 (152)
- floating rate 122 149 (27)
Total 196 375 (179)
TOTAL 2,999 2,909 90
At December 31, 2010, 39% (51% at December 31, 2009)
of net financial debt paid floating interest rates. Taking
account of cash flow hedges of interest rates considered
effective pursuant to the IFRS-EU, 14% of the debt was exposed
to interest rate risk at December 31, 2010 (26% at
December 31, 2009). If account is also taken of interest
rate derivatives used as hedges but which do not qualify
for hedge accounting, the residual exposure of net financial
debt to interest rate risk falls even lower, to 7% (20%
at December 31, 2009).
The Group’s main long-term financial debts are governed
by covenants containing undertakings by the borrowers
(Enel SpA, Endesa and the other Group companies) and
in some cases Enel SpA as guarantor that are commonly
adopted in international business practice. The main covenants
governing Enel’s debt regard the bond issues carried
out within the framework of the Global Medium-Term
Notes program, loans granted by the European Investment
Bank (EIB) and Cassa Depositi e Prestiti, the Credit
Agreement 2007, the Credit Agreement 2009 and the
€10 billion revolving line of credit agreed in April 2010. At
the same time, the €5 billion revolving line of credit was
extinguished. To date none of the covenants have been
triggered.
The commitments in respect of the bond issues in the
Global Medium-Term Notes program can be summarized
as follows:
> negative pledge clauses under which the issuer may
not establish or maintain (except under statutory
214 Enel Annual Report 2010 Consolidated financial statements
requirement) mortgages, liens or other encumbrances
on all or part of its assets to secure any listed bond or
bond for which listing is planned unless the same guarantee
is extended equally or pro rata to the bonds in
question;
> pari passu clauses, under which the securities constitute
a direct, unconditional and unsecured obligation
of the issuer and are issued without preferential rights
among them and have at least the same seniority as
other present and future bonds of the issuer;
> specification of default events, whose occurrence (e.g.
insolvency, failure to pay principle or interest, initiation
of liquidation proceedings, etc.) constitutes a default;
under cross-default clauses, the occurrence of a default
event in respect of any financial liability (above
a threshold level) issued by the issuer or “significant”
subsidiaries (i.e. consolidated companies whose gross
revenues or total assets are at least 10% of gross consolidated
revenues or total consolidated assets) constitutes
a default in respect of the liability in question,
which becomes immediately repayable;
> early redemption clauses in the event of new tax requirements,
which permit early redemption at par of
all outstanding bonds.
The main covenants governing the loans granted to a
number of Enel Group companies by the EIB can be summarized
as follows:
> negative pledge clauses, under which Enel undertakes
not to establish or grant to third parties additional