44.3.1 Long-term borrowings (including the portion falling due within 12 months) - €52,687 million
The following table reports the carrying amount and fair value for each category of long-term debt and interest rate, including the portion falling due within 12 months.
|Millions of euro||Nominal value||Carrying amount||Current portion||Portion due in more than 12 months||Fair value||Nominal value||Carrying amount||Current portion||Portion due in more than 12 months||Fair value||Changes in carrying amount|
|at Dec. 31, 2020||at Dec. 31, 2019|
|- listed, fixed rate||23,629||23,052||1,041||22,011||27,470||27,312||26,593||1,621||24,972||31,073||(3,541)|
|- listed, floating rate||2,817||2,800||260||2,540||2,937||3,515||3,488||258||3,230||3,655||(688)|
|- unlisted, fixed rate||13,262||13,184||-||13,184||15,753||14,458||14,359||-||14,359||15,794||(1,175)|
|- unlisted, floating rate||733||733||111||622||828||760||760||27||733||753||(27)|
|- fixed rate||790||782||254||528||833||896||893||279||614||947||(111)|
|- floating rate||9,278||9,250||1,115||8,135||9,259||8,610||8,565||842||7,723||8,642||685|
|- use of revolving credit lines||-||-||-||-||-||70||70||-||70||70||(70)|
|Total bank borrowings||10,068||10,032||1,369||8,663||10,092||9,576||9,528||1,121||8,407||9,659||504|
|- fixed rate||1,979||1,979||225||1,754||1,979||1,856||1,856||257||1,599||1,856||123|
|- floating rate||89||89||22||67||89||108||108||18||90||108||(19)|
|Other non-bank borrowings:|
|- fixed rate||607||639||74||565||630||792||822||92||730||811||(183)|
|- floating rate||191||179||66||113||160||86||69||15||54||75||110|
|Total other non-bank borrowings||798||818||140||678||790||878||891||107||784||886||(73)|
|Total fixed-rate borrowings||40,267||39,636||1,594||38,042||46,665||45,314||44,523||2,249||42,274||50,481||(4,887)|
|Total floating-rate borrowings||13,108||13,051||1,574||11,477||13,273||13,149||13,060||1,160||11,900||13,303||(9)|
The table below reports long-term financial debt by currency and interest rate.
LONG-TERM FINANCIAL DEBT BY CURRENCY AND INTEREST RATE
|Millions of euro||Carrying amount||Nominal value||Carrying amount||Nominal value||Current average nominal interest rate||Current effective
|at Dec. 31, 2020||at Dec. 31, 2019||at Dec. 31, 2020|
|Total non-euro currencies||27,106||27,286||30,311||30,548|
Long-term financial debt denominated in currencies other than the euro decreased by €3,205 million, largely attributable to the positive effect of the exchange rates of the main currencies.
CHANGE IN THE NOMINAL VALUE OF LONG-TERM DEBT
|Millions of euro||Nominal value||Repayments||Change in the consolidation scope||New issues||Other changes||Exchange differences||Nominal value|
|at Dec. 31, 2019||at Dec. 31, 2020|
|- of which leases||1,964||(208)||-||441||-||(129)||2,068|
|Total financial debt||58,463||(3,747)||(389)||3,924||(1,845)||(3,031)||53,375|
The nominal value of long-term debt amounted to €53,375 million at December 31, 2020, a decrease of €5,088 million compared with December 31, 2019. The increase in debt deriving from new issues of €3,924 million was easily offset by reductions associated with repayments in the amount of €3,747 million, exchange gains of €3,031 million, the deconsolidation of the debt of a number of South African companies in the amount of €389 million (that amount is net of new issues in 2020 by the deconsolidated companies) and other changes in debt totaling €1,845 million. This value includes €1,797 million reflecting the accounting effects of the consent solicitation directed at the holders of three non-convertible subordinated hybrid bonds denominated in euros in order to align their features with those of new issues. More specifically, the main change to those instruments regarded their maturity, which was transformed from fixed to perpetual, which means that they will be redeemed only in the event of liquidation. As a result, those bonds are no longer recognized as debt instruments but as equity instruments.
Repayments in 2020 concerned bonds in the amount of €2,109 million and borrowings totaling €1,638 million.
More specifically, the main bonds maturing in 2020 included:
- €410 million in respect of a fixed-rate hybrid bond issued by Enel SpA, maturing in January 2020;
- €100 million in respect of a fixed-rate bond issued by Enel Finance International, maturing in January 2020;
- €482 million in respect of a fixed-rate bond issued by Enel Finance International, maturing in March 2020;
- the equivalent of €93 million in respect of a fixed-rate bond in Swiss francs issued by Enel Finance International, maturing in June 2020;
- the equivalent of €438 million in respect of a fixed-rate bond in pounds sterling issued by Enel SpA, maturing in September 2020;
- the equivalent of €274 million in respect of a fixed-rate hybrid bond in pounds sterling repurchased early by Enel SpA in September 2020;
- the equivalent of €286 million in respect of bonds issued by the Latin American companies.
The main repayments of borrowings in the year included the following:
- €150 million in respect of a floating-rate loan of Enel SpA;
- €182 million in respect of loan repayments by Endesa;
- €285 million in respect of loans linked to the achievement of sustainability goals of the Group’s Italian companies;
- the equivalent of €585 million associated with Latin American companies.
New borrowing carried out in 2020 involved bonds in the amount of €668 million and borrowings of €3,256 million (both translated at the exchange rates prevailing at the issue date).
The table below shows the main characteristics of the most significant financial transactions involving bond issues and bank borrowings carried out in 2020 and translated into euros at the exchange rate prevailing at December 31, 2020:
|Issuer/Borrower||Issue/Grant date||Amount in millions of euro||Currency||Interest rate||Interest rate type||Maturity|
|Enel Finance International||20.10.2020||557||GBP||1.00%||Fixed rate||20.10.2027|
|Codensa||25.08.2020||60||COP||CPI + 2.5%||Floating rate||25.08.2027|
|Enel SpA||26.10.2020||500||EUR||Euribor 6M + 1%||Floating rate||15.10.2026|
|Enel SpA||27.11.2020||500||EUR||Euribor 6M + 1%||Floating rate||15.10.2026|
|Enel Finance America||21.01.2020||277||USD||LIBOR 6 M + 1.3%||Floating rate||20.11.2026|
|Endesa||20.04.2020||300||EUR||Euribor 3M + 0.7%||Floating rate||19.04.2022|
|e-distribuzione||30.03.2020||250||EUR||Euribor 6M + 0.42%||Floating rate||30.03.2035|
|Dolores Wind SA de Cv||09.03.2020||57||USD||LIBOR 6 M + 1.4%||Floating rate||15.01.2027|
|Enel Distribuição São Paulo||17.04.2020||71||USD||2.96%||Fixed rate||19.04.2021|
|Enel Rus Wind Kola||27.03.2020||39||RUB||OFZ 3Y+ 1.55%||Floating rate||26.02.2034|
|Endesa||01.09.2020||35||EUR||Euribor 6M + 0.51%||Floating rate||03.09.2035|
|Parque Amistad IV SA de Cv||09.03.2020||33||USD||LIBOR 6 M + 1.4%||Floating rate||15.01.2027|
|EGP Magdalena Solar SA de Cv||09.03.2020||33||USD||LIBOR 6 M + 1.4%||Floating rate||15.01.2027|
|Enel Distribuição Ceará||07.01.2020||30||USD||2.1%||Fixed rate||07.01.2021|
|Enel Distribuição Goiás||06.03.2020||27||USD||1.8%||Fixed rate||08.03.2021|
|Enel Distribuição Rio de Janeiro||23.12.2020||32||USD||1.4%||Fixed rate||23.12.2022|
|Total bank borrowings||2,184|
The Group’s main long-term financial liabilities are governed by covenants that are commonly adopted in international business practice. These liabilities primarily regard the bond issues carried out within the framework of the Global/Euro Medium-Term Notes program, issues of subordinated unconvertible hybrid bonds (so-called “hybrid bonds”) and loans granted by banks and other financial institutions (including the European Investment Bank and Cassa Depositi e Prestiti SpA).
The main covenants regarding bond issues carried out within the framework of the Global/Euro Medium-Term Notes program of (i) Enel and Enel Finance International NV (including the green bonds of Enel Finance International NV guaranteed by Enel SpA, which are used to finance the Group’s so-called eligible green projects) and those regarding bonds issued by Enel Finance International NV on the US market guaranteed by Enel SpA can be summarized as follows:
- negative pledge clauses under which the issuer and the guarantor may not establish or maintain mortgages, liens or other encumbrances on all or part of its assets or revenue to secure certain financial liabilities, unless the same encumbrances are extended equally or pro rata to the bonds in question;
- pari passu clauses, under which the bonds and the associated security constitute a direct, unconditional and unsecured obligation of the issuer and the guarantor and are issued without preferential rights among them and have at least the same seniority as other present and future unsubordinated and unsecured bonds of the issuer and the guarantor;
- cross-default clauses, under which the occurrence of a default event in respect of a specified financial liability (above a threshold level) of the issuer, the guarantor or, in some cases, “significant” subsidiaries, constitutes a default in respect of the liabilities in question, which become immediately repayable.
Since 2019, Enel Finance International NV has issued a number of “sustainable” bonds on the European market (as part of the Euro Medium Term Notes - EMTN bond issue program) and on the American market, both guaranteed by Enel SpA, linked to the achievement of a number of the Sustainable Development Goals (SDGs) of the United Nations that contain the same covenants as other bonds of the same type.
The main covenants covering Enel’s hybrid bonds, including the perpetual hybrid bond issues in September, which will be repaid in the event of the dissolution or liquidation of the Company, can be summarized as follows:
- subordination clauses, under which each hybrid bond is subordinate to all other bonds issued by the company and has the same seniority with all other hybrid financial instruments issued, being senior only to equity instruments;
- prohibition on mergers with other companies, the sale or leasing of all or a substantial part of the company’s assets to another company, unless the latter succeeds in all obligations of the issuer.
The main covenants envisaged in the loan contracts of Enel and Enel Finance International NV and the other Group companies, including the sustainability-linked loan facility agreements obtained by Enel in 2019 and 2020, can be summarized as follows:
- negative pledge clauses, under which the borrower and, in some cases, the guarantor are subject to limitations on the establishment of mortgages, liens or other encumbrances on all or part of their respective assets, with the exception of expressly permitted encumbrances;
- disposals clauses, under which the borrower and, in some cases, the guarantor may not dispose of their assets or operations, with the exception of expressly permitted disposals;
- pari passu clauses, under which the payment undertakings of the borrower have the same seniority as its other unsecured and unsubordinated payment obligations;
- change of control clauses, under which the borrower and, in some cases, the guarantor could be required to renegotiate the terms and conditions of the financing or make compulsory early repayment of the loans granted;
- rating clauses, which provide for the borrower or the guarantor to maintain their rating above a certain specified level;
- cross-default clauses, under which the occurrence of a default event in respect of a specified financial liability (above a threshold level) of the issuer or, in some cases, the guarantor constitutes a default in respect of the liabilities in question, which become immediately repayable.
In some cases the covenants are also binding for the significant companies or subsidiaries of the obligated parties. All the borrowings considered specify “events of default” typical of international business practice, such as, for example, insolvency, bankruptcy proceedings or the entity ceases trading.
In addition, the guarantees issued by Enel in the interest of e-distribuzione SpA for certain loans to e-distribuzione SpA from Cassa Depositi e Prestiti SpA require that at the end of each six-month measurement period that Enel’s net consolidated financial debt shall not exceed 4.5 times annual consolidated EBITDA.
Finally, the debt of Endesa SA, Enel Américas SA, Enel Chile SA and the other Spanish and Latin American subsidiaries (notably Enel Generación Chile SA) contain covenants and events of default typical of international business practice, which had all been complied with as at December 31, 2020.
The following table reports the impact on gross long-term debt of hedges to mitigate currency risk.
LONG-TERM FINANCIAL DEBT BY CURRENCY AFTER HEDGING
|Millions of euro||at Dec. 31, 2020||at Dec. 31, 2019|
|Initial debt structure||Impact of hedge||Debt structure after hedging||Initial debt structure||Impact of hedge||Debt structure after hedging|
|Carrying amount||Nominal value||%||Carrying amount||Nominal value||%|
|Total non-euro currencies||27,106||27,286||51.1%||(18,423)||8,863||16.6%||30,311||30,548||52.2%||(20,218)||10,330||17.7%|
The amount of floating-rate debt that is not hedged against interest rate risk is a risk factor that could impact the income statement (raising borrowing costs) in the event of an increase in market interest rates.
|Millions of euro||2020||2019|
At December 31, 2020, 32.6% of financial debt was floating rate (27.4% at December 31, 2019). Taking account of hedges of interest rates considered effective pursuant to the IFRS-EU, 22.9% of net financial debt at December 31, 2020 (19.6% at December 31, 2019) was exposed to interest rate risk. Including interest rate derivatives treated as hedges for management purposes but ineligible for hedge accounting, the percentage of net financial debt hedged at December 31, 2020 was unchanged compared with the previous year.
These results are in line with the limits established in the risk management policy.
44.3.2 Short-term borrowings - €6,345 million
At December 31, 2020 short-term borrowings amounted to €6,345 million, an increase of €2,428 million on December 31, 2019. They break down as follows.
|Millions of euro|
|at Dec. 31, 2020||at Dec. 31, 2019||Change|
|Short-term bank borrowings||711||579||132|
|Cash collateral and other financing on derivatives||370||750||(380)|
|Other short-term borrowings (1)||410||304||106|
(1) Does not include current borrowings included in other current financial liabilities.
Commercial paper amounted to €4,854 million, issued by Enel Finance International, Enel Finance America and Endesa.
The main commercial paper programs include:
- €6,000 million of Enel Finance International;
- €4,000 million of Endesa;
- $3,000 million (equivalent to €2,445 million at December 31, 2020) of Enel Finance America.
During 2020 Enel Finance International and Endesa structured commercial paper programs linked to sustainability goals and at December 31, 2020 these issues totaled €3,901 million.