As of December 31, 2006, the majority of Allianz SE’s external debt financing was in the form of debentures and money market securities.
Our total certificated liabilities outstanding as of December 31, 2006 and 2005 were € 54,922 million and € 59,203 million, respectively. Of the certificated liabilities outstanding as of December 31, 2006, € 33,542 million are due within one year. See Note 21 to our consolidated financial statements for further information. Our total participation certificates and subordinated liabilities outstanding as of December 31, 2006 and 2005 were € 16,362 million and € 14,684 million, respectively. Of the participation certificates and subordinated liabilities as of December 31, 2006, € 1,481 million are due within one year. For further information please see page 178. You find them in the PDF file "Supplementary Information to the Consolidated Balance Sheets", which you can download on page Notes to the Consolidated Financial Statements. For information regarding how we use certain derivatives to hedge our exposure to interest rate and foreign currency risk related to certificated and subordinated liabilities please see pages 197 to 198. You find them in the PDF file "Other information", which you can download on page Notes to the Consolidated Financial Statements.
Allianz SE owns several finance companies. Among those, primarily Allianz Finance B.V. and Allianz Finance II B.V., both incorporated in the Netherlands, are used from time to time for external debt financing and other corporate financing purposes. In addition, in December 2003, Allianz SE (then Allianz AG) established a Medium Term Note (or “MTN”) program which is used from time to time for the purposes of external and internal debt issuance. The aggregate volume of debt issued by Allianz Finance B.V. and Allianz Finance II B.V. for the years ended December 31, 2006 and 2005 was € 2.3 billion and € 2.7 billion, respectively. As of December 31, 2006, Allianz SE had money market securities outstanding with a carrying value of € 870 million.
On December 20, 2006, we repaid the RWE exchangeable bond issued in 2001. The issue amount of € 1,075 million was repaid in shares as the share price of RWE AG was above the exercise price. Additionally, on May 2, 2006, we repaid the € 1,446 million equity-linked loan issued in the third quarter of 2005 in connection with financing the Allianz-RAS merger. Our use of commercial paper as a short-term financing instrument was reduced by 18.2% to € 0.9 billion in 2006 from € 1.1 billion in 2005. However, interest expense on commercial paper increased to € 47.0 million (2005: € 31.3 million) due to increasing interest rates in 2006 and higher average usage.
In March 2006, Allianz Finance II B.V. issued € 800 million of subordinated perpetual bonds, guaranteed by Allianz SE, with a coupon rate of 5.375%. Allianz Finance II B.V. has the right to call the bonds after five years.
Under our MTN program, Allianz Finance II B. V. issued € 1.5 billion of senior bonds on November 23, 2006, guaranteed by Allianz SE, with a coupon rate of 4.00%. The maturity of the bond is November 23, 2016.
On January 18, 2007, Allianz SE announced its intention to acquire the outstanding shares in AGF that it does not already own. In addition, Allianz AZL Vermögensverwaltung GmbH & Co. KG, a subsidiary of Allianz Deutschland AG, Allianz SE’s wholly-owned German insurance holding company, announced its intention to acquire the approximately 9% of outstanding shares of Allianz Leben that Allianz Deutschland AG does not already own. The cash consideration required for the two transactions of approximately € 7.5 billion, which amount depends primarily on the acceptance rate of the cash tender offers, is planned to be funded internally by the Allianz Group. However, to bridge possible time gaps until the necessary liquidity is available, bridge loans from different financial institutions may be used. See “Executive Summary and Outlook – Outlook – Significant Expected Investments” for further information.
On January 29, 2007, the Allianz Group announced its intention to make an early redemption of 64.35% of the BITES exchangeable bond issued in February 2005 as part of the Allianz Group’s “All-in-One” capital market transactions. For further information on this early redemption please see pages 223 to 224. You find them in the PDF file "Other information", which you can download on page Notes to the Consolidated Financial Statements.
The following table sets forth Allianz SE’s issued debt as of December 31, 2006 and 2005.
Allianz SE’s issued debt as of December 31,(1)
2006
2005
Nominal
value
€ mn
Carrying
value
€ mn
Interest
expense
€ mn
Nominal
value
€ mn
Carrying
value
€ mn
Interest
expense
€ mn
Senior bonds2)
6,232
6,201
258.9
4,732
4,696
250.3
Subordinated bonds
7,079
6,883
404.6
6,324
6,220
355.7
Exchangeable bonds
1,262
1,262
14.8
2,337
2,326
103.1
Total
14,573
14,346
678.3
13,393
13,242
709.1
The following table describes Allianz SE’s issued debt outstanding as of December 31, 2006 at nominal values. For further information please see pages 178 and 179. You find them in the PDF file "Supplementary Information to the Consolidated Balance Sheets", which you can download on page Notes to the Consolidated Financial Statements.
Allianz SE’s issued debt outstanding as of December 31, 2006 at nominal values(1)
Interest
expense
in 2006
1. Senior bonds
5.75% bond issued by Allianz Finance B.V.,
Amsterdam
Volume
€ 1.1 bn
Year of issue
1997/2000
Maturity date
7/30/2007
SIN
194 000
ISIN
DE 000 194 000 5
Interest expense
€ 63.8 mn
5.0% bond issued by Allianz Finance B.V.,
Amsterdam
Volume
€ 1.6 bn
Year of issue
1998
Maturity date
3/25/2008
SIN
230 600
ISIN
DE 000 230 600 8
Interest expense
€ 84.8 mn
4.625% bond issued by Allianz Finance II B.V., Amsterdam
Volume
€ 1.1 bn
Year of issue
2002
Maturity date
11/29/2007
SIN
250 035
ISIN
XS 015 878 835 5
Interest expense
€ 52.6 mn
5.625% bond issued by Allianz Finance II B.V., Amsterdam
Volume
€ 0.9 bn
Year of issue
2002
Maturity date
11/29/2012
SIN
250 036
ISIN
XS 015 879 238 1
Interest expense
€ 51.1 mn
4.00% bond issued by Allianz Finance B.V.,
Amsterdam
Volume
€ 1.5 bn
Year of issue
2006
Maturity date
11/23/2016
SIN
A0G180
ISIN
XS 027 588 026 7
Interest expense
€ 6.6 mn
Total interest expense for senior bonds
€ 258.9 mn
2. Subordinated bonds
6.125% bond issued by Allianz Finance II B. V., Amsterdam
Volume
€ 2 bn
Year of issue
2002
Maturity date
5/31/2022
SIN
858 420
ISIN
XS 014 888 756 4
Interest expense
€ 123.5 mn
7.25% bond issued by Allianz Finance II B. V., Amsterdam
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