Net financial debt

Net financial debt for the Company at December 31, 2009 (€3,260.9 million) can be broken down as follows:

In millions of euros Dec. 31, 2009 Dec. 31, 2008 Change
A. Medium- and long-term debt      
Bond (1) 2,643.5 2,031.8 611.7
Floating-rate loans(1) 1,555.7 1,615.2 -59.5
Derivative financial instruments (2) -40.6 -49.7 9.1
Other financial liabilities 0.0 0.9 -0.9
Loan to TELAT (3) -500.0 0.0 -500.0
Total A 3,658.6 3,598.2 60.4
B. Short-term debt/(liquidity)      
Floating-rate loans (current portion) (4) 59.7 44.6 15.1
Short-term loans 40.0 0.0 40.0
Short-term securities(5) -500.0 0.0 -500.0
Net position on the intercompany current accounts (6) 2.7 0.5 2.2
Cash and cash equivalents -0.1 -689.2 689.1
Total B -397.7 -644.1 246.4
Total A+B 3,260.9 2,954.1 306.8

In the statement of financial position:
(1) this figure corresponds to “Long-term loans”;
(2) this figure corresponds to “Non-current financial liabilities” and “Non-current financial assets” for the value of the fair value hedge derivatives (€123.2 million);
(3) this figure is included under “Non-current financial assets”;
(4) this figure corresponds to “Current portion of long-term loans”;
(5) this figure is included under “Current financial assets”;
(6) this figure is included under “Short-term loans”.

Net financial debt increased by €306.8 million. This change is due primarily to the following:

  • an increase in the value of bonds (€611.7 million) due to the disbursement of the private placement in July (€600 million), as well as the effect of the adjustment to the fair value of these financial instruments (€7.2 million) and the capitalisation of inflation for the period (€4.5 million) net of amortised cost;
  • a €44.4 million reduction in floating-rate loans, mainly as a result of the payment of amounts due on European Investment Bank (EIB) loans;
  • a decrease in the net asset balance (€9.1 million) related to derivative financial instruments due to:
    • an increase in financial assets related to fair value hedge derivatives for bonds in the amount of €7.7 million due to a reduction in market interest rates during the year;
    • an increase in financial liabilities related to cash-flow hedge derivatives to cover floating-rate debt in the amount of €16.8 million attributable to the change in interest rates;
  • new loan to TELAT in the amount of €500 million, which was disbursed in November. This five-year, floating-rate (6- month Euribor plus a spread of 250 basis points) loan, to be repaid in semi-annual instalments, was granted in order to provide TELAT with immediately available funds to be used to reimburse share capital, which also took place in November (in the amount of €600 million);
  • an increase in short-term loans (€40 million) related to the use of current account overdraft;
  • an investment in the third quarter in short-term securities (issued by UBS and MPS) in the amount of €500 million;
  • a €2.2 million increase in the net position on the intercompany current accounts held with TELAT and SunTergrid for the purposes of centralised treasure management;
  • a €689.1 million decrease in the Company’s cash and cash equivalents