Aviva 2014 Annual Report Download - page 215

Aviva plc Annual report and accounts 2014
211
50 – Borrowings continued
(b) Core structural borrowings
(i) The carrying amounts of these borrowings are:
2014 2013
Upper Tier 2
£m
Lower Tier 2
£m
Senior
£m
Total
£m
Upper Tier 2
£m
Lower Tier 2
£m
Senior
£m
Total
£m
Subordinated debt
6.125% £700 million subordinated notes 2036
—
692
—
692 — 692
—
692
5.700% €500 million undated subordinated notes 387
—
—
387 415 —
—
415
6.125% £800 million undated subordinated notes 794
—
—
794 793 —
—
793
6.125% €650 million subordinated notes 2043
—
502
—
502 — 537
—
537
6.875% £600 million subordinated notes 2058
—
594
—
594 — 594
—
594
6.875% €500 million subordinated notes 2018
—
387
—
387 — 415
—
415
10.6726% £200 million subordinated notes 2019
—
—
—
—
— 200
—
200
10.464% €50 million subordinated notes 2019
—
—
—
—
— 42
—
42
8.25% $400 million subordinated notes 2041
—
252
—
252 — 236
—
236
6.625% £450 million subordinated notes 2041
—
447
—
447 — 446
—
446
3.875% €700 million subordinated debt 2044
—
539
—
539 — —
—
—
1,181 3,413 — 4,594 1,208 3,162 — 4,370
Debenture Loans
9.5% guaranteed bonds 2016
—
—
200 200 — — 199 199
— — 200 200 — — 199 199
Commercial paper — — 516 516 — — 556 556
Total 1,181 3,413 716 5,310 1,208 3,162 755 5,125
The classifications between Upper Tier 2, Lower Tier 2 and Senior debt shown above are as defined by the PRA in GENPRU Annex 1
‘Capital Resources’. All the above borrowings are stated at amortised cost.
As described in note 59, the Group has designated a portion of its euro denominated debt as a hedge of the net investment in
its European subsidiaries. The carrying value of the debt, included in the table above, at 31 December 2014 was £1,292 million
(2013: £1,428 million).
(ii) The contractual maturity dates of undiscounted cash flows for these borrowings are:
2014 2013
Principal
£m
Interest
£m
Total
£m
Principal
£m
Interest
£m
Total
£m
Within one year 516 304 820 556 314 870
1 to 5 years 200 1,149 1,349 200 1,204 1,404
5 to 10 years
—
1,340 1,340 242 1,348 1,590
10 to 15 years 1,188 1,322 2,510 — 1,341 1,341
Over 15 years 3,442 2,924 6,366 4,165 2,950 7,115
Total contractual undiscounted cash flows 5,346 7,039 12,385 5,163 7,157 12,320
Borrowings are considered current if the contractual maturity dates are within a year. Where subordinated debt is undated or loan
notes are perpetual, the interest payments have not been included beyond 15 years. Annual interest payments for these
borrowings are £72 million (2013: £73 million).
Contractual undiscounted interest payments are calculated based on underlying fixed interest rates or prevailing market
floating rates as applicable. Year-end exchange rates have been used for interest projections on loans in foreign currencies.
(c) Operational borrowings
(i) The carrying amounts of these borrowings are:
2014
£m
2013
£m
Amounts owed to financial institutions
Loans 696 1,410
Securitised mortgage loan notes
UK lifetime mortgage business 1,372 1,313
Total 2,068 2,723
All the above borrowings are stated at amortised cost, except for the loan notes issued in connection with the UK lifetime
mortgage business of £1,372 million (2013: £1,313 million). These loan notes are carried at fair value, their values are modelled on
risk-adjusted cash flows for defaults discounted at a risk-free rate plus a market-determined liquidity premium, and are therefore
classified as either ‘Level 2’ or ‘Level 3’ in the fair value hierarchy, depending on whether observable market prices are available for
the loan note. These have been designated at fair value through profit and loss in order to present the relevant mortgages,
borrowings and derivative financial instruments at fair value, since they are managed as a portfolio on a fair value basis. This
presentation provides more relevant information and eliminates any accounting mismatch.
The securitised mortgage loan notes are at various fixed, floating and index-linked rates. Further details about these notes are
given in note 25.
Aviva plc Annual report and accounts 2014 |211
IFRS Financial statements