Aviva 2002 Annual Report Download - page 97

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42 – Debenture loans, amounts due to credit institutions and commercial paper continued
The 1.5% FF2.8 billion exchangeable bonds were issued by a French subsidiary undertaking and were redeemed at the option of that
company in June 2002.
The 10.75% guaranteed bonds matured in March 2002 and were repaid on the same date.
The 2.5% subordinated perpetual loan notes were issued by a Dutch subsidiary undertaking to finance the acquisition of NUTS OHRA
Beheer BV. These loan notes have a face value of 1489.9 million and their fair value is estimated at 1172.4 million (2001: 2175.0 million)
which is based on the future cash flows in perpetuity discounted back at a market rate of interest. The rate of interest paid on the notes
will be gradually increased over the next seven years to a maximum of 2.76%. The loan notes are convertible into ordinary shares in
Delta Lloyd NV, should there be a public offering of those shares.
The long-term institutional borrowings in the prior year arose wholly in the Netherlands and were mainly in respect of segregated funds
for external pension schemes.
(c) Amounts due to credit institutions comprise:
Long-term business General business Other
2002 2001 2002 2001 2002 2001
£m £m £m £m £m £m
Bank loans 85 –11 11 169 180
85 –11 11 169 180
Repayable as follows:
One year or less ––11 11 93 156
Between one and two years ––––75 –
Between two and five years ––––1–
After five years 85 ––––24
85 –11 11 169 180
The interest charge for the year on the above was: 2–1113 14
As explained in note 20(a), the UK long-term business policyholder funds have invested in a number of property limited partnerships
(“PLPs”). The PLPs have raised external debt, secured on their respective property portfolios, and the lenders are only entitled to obtain
payment of both interest and principal to the extent there are sufficient resources in the respective PLPs. The lenders have no recourse
whatsoever to the policyholder or shareholders’ funds of any companies in the Aviva Group. The figures in the long-term business
columns above relate to those PLPs which have been consolidated as subsidiaries.
(d) Commercial paper comprises:
Other
2002 2001
£m £m
Average rate 4% (2001: 5%) 1,453 1,686
The interest charge for the year on the above borrowings was: 67 83
All commercial paper is repayable within one year and is issued in a number of different currencies. Part of this has been converted into
a sterling liability through the use of financial instruments in the Company and a subsidiary undertaking.
(e) The Company’s loans comprise:
2002 2001
£m £m
9.5% guaranteed bonds 2016 198 198
8.625% guaranteed bonds 2005 199 199
10.75% guaranteed bonds 2002 –100
Bank loans 75 –
Commercial paper 1,433 1,641
1,905 2,138
Repayable as follows:
One year or less 1,433 1,741
Between one and two years 75 –
Between two and five years 199 199
After five years 198 198
472 397
1,905 2,138
(f) Loans exclude intra-group borrowings, certain of which are guaranteed by third parties.
83 Aviva plc
Annual report + accounts 2002