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PRYSMIAN GROUP | DIRECTORS’ REPORT
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FINANCIAL RISKS
The Prysmian Group's risk management strategy focuses on the unpredictability of markets and aims to
minimise the potentially negative impact on the Group's financial performance. Some types of risk are
mitigated by using financial instruments (including derivatives).
Financial risk management is centralised with the Group Finance Department which identifies, assesses and
hedges financial risks in close cooperation with the Group's operating companies.
The Group Finance, Administration and Control Department provides written guidelines on monitoring risk
management, as well as on specific areas such as exchange rate risk, interest rate risk, credit risk, the use of
derivative and non-derivative instruments, and how to invest excess liquidity.
Such financial instruments are used solely to hedge risks and not for speculative purposes.
Risks associated with availability of financial resources and their cost
The volatility of the international banking and financial system could represent a potential risk factor in terms
of raising finance and its associated cost. Prysmian Group believes that it has significantly mitigated such a
risk insofar as, in recent years, it has always been able to raise sufficient financial resources, and at a
competitive cost.
The Group's main sources of finance are:
Credit Agreement 2014: this is a five-year revolving credit facility for Euro 1,000 million, finalised in
June 2014. This agreement was notable not only for the significant sum secured thanks to strong
interest by the lenders involved, but also for its more competitive cost than previous facilities. The
lighter financial covenants already applied to the Group's other credit agreements were confirmed for
this facility. The annual interest rate is equal to the sum of Euribor and an annual spread determined
on the basis of the ratio between consolidated net financial position and consolidated EBITDA. This
facility was not drawn down as at 31 December 2015;
Revolving Credit Facility 2014: this credit facility for Euro 100 million has been granted by
Mediobanca - Banca di Credito Finanziario S.p.A. This five-year facility had been drawn down by
Euro 50 million as at 31 December 2015;
EIB Loan: this loan for Euro 100 million, received in February 2014 from the European Investment
Bank (EIB), is intended to fund the Group's European R&D plans over the period 2013-2016. The
outstanding amount of the loan as at 31 December 2015 was Euro 92 million, having made the first
repayment in August 2015;
Convertible bond: a convertible bond for Euro 300 million was placed with institutional investors in
March 2013; it carries a 1.25% coupon and matures in March 2018;