ING Direct 2013 Annual Report Download - page 148

ING Groep N.V.’s Articles of Association make provision for the cancellation of cumulative preference shares. Upon cancellation of
cumulative preference shares and upon liquidation of ING Groep N.V., the amount paid up on the cumulative preference shares will be
repaid together with the dividend shortfall in preceding years, insofar as this shortfall has not yet been made up.
Cumulative preference shares - Restrictions with respect to dividend and repayment of capital
ING Groep N.V. is subject to legal restrictions regarding the amount of dividends it can pay to the holders of its cumulative preference
shares, when issued. Pursuant to the Dutch Civil Code, dividends can only be paid up to an amount equal to the excess of the company’s
own funds over the sum of the paid-up capital, and reserves required by law.
Moreover, ING Groep N.V.’s ability to pay dividends is dependent on the dividend payment ability of its subsidiaries. ING Groep N.V. is
legally required to create a non-distributable reserve insofar profits of its subsidiaries are subject to dividend payment restrictions which
apply to those subsidiaries themselves. Such restrictions may among others be of a similar nature as the restrictions which apply to ING
Groep N.V. or may be the result of minimum capital requirements that are imposed by industry regulators in the countries in which the
subsidiaries operate, or other limitations which may exist in certain countries.
No specific dividend payment restrictions with respect to the cumulative preference shares exist.
Furthermore, ING Groep N.V. is subject to legal restrictions with respect to repayment of capital to holders of cumulative preference
shares. Capital may be repaid to the holders of cumulative preference shares pursuant to (i) an amendment of ING Groep N.V.’s articles of
association whereby the cumulative preference shares are written down or (ii) a resolution to redeem and cancel the cumulative preference
shares.
Pursuant to the Dutch Civil Code, capital may only be repaid if none of ING Groep N.V.’s creditors opposes such a repayment within two
months following the announcement of a resolution to that effect.
LIABILITIES
15 SUBORDINATED LOANS
Subordinated loans
Notional amount in original currency Balance sheet value
Interest rate Year of issue First call date Step-up Total
Lent on to
ING Bank
Lent on to
NN Group 2013 2012
9.000% 2008 None EUR 10 10 10
8.500% 2008 15 September 2013 No USD 2,000 2,000 1,508
8.000% 2008 18 April 2013 No EUR 1,500 1,050 450 1,501 1,502
7.375% 2007 15 October 2012 No USD 1,500 500 1,000 (1) 1,025 1,137
6.375% 2007 15 June 2012 No USD 1,045 1,045 759 792
5.140% 2006 17 March 2016 Yes GBP 66 66 79 81
5.775% 2005 8 December 2015 Yes USD 364 364 272 288
6.125% 2005 15 January 2011 No USD 700 400 300 (1) 486 529
4.176% 2005 8 June 2015 Yes EUR 169 169 168 168
Variable 2004 30 June 2014 No EUR 555 555 566 558
6.200% 2003 15 January 2009 No USD 500 500 353 369
Variable 2003 30 June 2013 No EUR 430 430 433 427
7.200% 2002 15 December 2007 No USD 1,100 1,100 (1) 715 820
7.050% 2002 15 September 2007 No USD 800 800 522 597
6,889 8,786
(1) These USD loans to NN Group were converted into EUR loans from 30 September 2013.
Subordinated loans consist of perpetual subordinated bonds issued by ING Groep N.V. These bonds have been issued to raise hybrid
capital for NN Group (originally issued by ING Verzekeringen N.V.) and Tier 1 capital for ING Bank N.V. Under IFRS-EU these bonds are
classified as liabilities. They are considered capital for regulatory purposes.
2013 – Call of perpetual subordinated loans
In December 2013, ING Group called the USD 2 billion 8.5% Tier 1 hybrid loan.
2011 – Exchange offers
On 12 December 2011, ING announced the launch of three separate exchange offers in Europe and tender offers in the United States of
America, on a total of seven series of outstanding subordinated securities of ING entities with a total nominal value of approximately EUR
5.8 billion. Of this amount, EUR 4.8 billion relates to securities issued by ING Groep N.V. and EUR 1.0 billion originally issued by ING
Verzekeringen N.V. All tender and exchange offers announced on 12 December 2011 were successfully completed on 23 December 2011
with an average participation of approximately 60%. As part of this initiative, EUR 0.9 billion intercompany debt from ING Bank N.V. to
Notes to the consolidated annual accounts of ING Group continued
146 ING Group Annual Report 2013