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32. FINANCIAL COVENANTS
The Credit Agreement 2010 and Credit Agreement 2011, details
of which are presented in Note 12, require the Group to comply
with a series of covenants on a consolidated basis.
The main covenants, classified by type, are listed below:
a) Financial covenants
• Ratio between EBITDA and Net finance costs
(as defined in the Credit Agreements)
• Ratio between Net Financial Position and EBITDA
(as defined in the Credit Agreements)
b) Non-financial covenants
A number of non-financial covenants have been established
in line with market practice applying to transactions of a
similar nature and size. These covenants involve a series
of restrictions on the grant of secured guarantees to third
parties, on the conduct of acquisitions or equity transactions,
and on amendments to the Company’s by-laws.
Default events
The main default events are as follows:
• default on loan repayment obligations;
• breach of financial covenants;
• breach of some of the non-financial covenants;
• declaration of bankruptcy or subjection of Group companies
to other insolvency proceedings;
• issuance of particularly significant judicial rulings;
• occurrence of events that may adversely and significantly
affect the business, the assets or the financial conditions
of the Group.
Should any default event occur, the lenders are entitled to de-
mand full or partial repayment of the outstanding amounts
lent under the Credit Agreements, together with interest
and any other amount due under the terms and conditions of
these Agreements. No collateral security is required.
The evolution of the covenants for the above agreements is shown in the following table:
(*) The ratios have been calculated on the basis of the definitions contained in the Credit Agreement 2010 and the Credit Agreement 2011.
(*) The ratios have been calculated on the basis of the definitions contained in the Credit Agreement 2010 and the Credit Agreement 2011.
30 June 31 December
30 June
31 December
30 June 31 December
30 June
2011
2011
2012
2012
2013
2013
2014
and
thereafter
Net financial position/EBITDA(*)
3.50x
3.50x
3.50x
3.00x
3.00x
2.75x
2.50x
EBITDA/Net finance costs(*)
4.00x
4.00x
4.00x
4.25x
4.25x
5.50x
5.50x
31 December 2013 31 December 2012
EBITDA/Net finance costs(*)
6.91
6.78
Net financial position /EBITDA(*)
1.28
1.32
The above financial ratios comply with both the covenants contained in the Credit Agreement 2010 and in the Credit
Agreement 2011.
Actual financial ratios reported at year end are as follows:
