94 / 278
PRYSMIAN GROUP | DIRECTORS’ REPORT
94
Non-convertible bond 2015: on 10 March 2015, the Board of Directors of Prysmian S.p.A. authorised
management to proceed, depending on prevailing market conditions and in any case by 30 June
2016, with the issuance and private or public placement of bonds in one or more tranches. These
bonds were intended for sale to institutional investors only. Consequently, on 30 March 2015
Prysmian S.p.A. completed the placement with institutional investors of an unrated bond, on the
Eurobond market, for a total nominal value of Euro 750 million. The bond, with an issue price of Euro
99.002, has a 7-year maturity and will pay a fixed annual coupon of 2.50%. The bond settlement
date was 9 April 2015. The bond has been admitted to the Luxembourg Stock Exchange and is
traded on the related regulated market. Prysmian has used the bond issue proceeds to redeem the
Euro 400 million Eurobond that matured on 9 April 2015 and to repay early the Term Loan Facility
2011 for Euro 400 million.
As at 31 December 2015, the Group's total financial resources, comprising cash and cash equivalents and
undrawn committed credit lines, came to in excess of Euro 1 billion.
A detailed analysis of "Borrowings from banks and other lenders" can be found in the Explanatory Notes to
the Consolidated Financial Statements.
Financial covenants
The credit agreements mentioned in the preceding paragraph contain a series of financial and non-financial
covenants with which the Group must comply. These covenants could restrict the Group's ability to increase
its net debt, other conditions remaining equal; should it fail to satisfy one of the covenants, this would lead to
a default event which, unless resolved under the terms of the respective agreements, could lead to their
termination and/or an early repayment of any amounts drawn down. In such an eventuality, the Group might
be unable to repay the amounts demanded early, which in turn would give rise to a liquidity risk.
The financial covenants are measured at the half-year close on 30 June and at the full-year close on 31
December. All covenants, financial or otherwise, were fully observed at 31 December 2015. In particular:
(i)
the ratio between EBITDA and Net finance costs, as defined in the credit agreements, was 14.34x
(against a required covenant of not less than 5.50x for the credit agreements signed before
December 2013 and 4.00x for those signed in 2014);
(ii)
the ratio between Net Financial Position and EBITDA, as defined in the credit agreements, was
1.06x (against a required covenant of below 2.50x for the credit agreements signed before
December 2013 and 3.00x for those signed in 2014).
As things stand and in view of the level of the financial covenants reported above, Prysmian Group believes
this is a risk it will not have to face in the near future. A more detailed analysis of the risk in question can be
found in the Explanatory Notes to the Consolidated Financial Statements.