talanx group annual report 2011 en

208
Financial statements Notes
General information
Talanx Group. Annual Report 2011
Accounting principles
and policies
Segment reporting Consolidation,
business combinations
Non-current assets held for
sale and disposal groups
The funds held under reinsurance treaties represent collateral withheld for technical provisions
ceded to reinsurers and retrocessionaires and to this extent do not trigger any cash flows. The
changes in the funds held under reinsurance treaties normally follow the changes in the corresponding
ceded technical provisions. For that reason, these funds have no contractually fixed
maturity; they are liquidated in step with the run-off of the corresponding provisions.
In addition to the assets available for covering provisions and liabilities, the Group has at its
disposal the following lines of credit that can be drawn upon as required:
Talanx AG has concluded a firm agreement with a broad consortium of banks providing for a
floating-rate line of credit that may be drawn upon as necessary. As at the balance sheet date we had
used a tranche amounting to altogether EUR 550 million. The nominal amount of the line of credit
was EUR 1.5 billion as at the balance sheet date. In 2011, Talanx AG concluded agreements on two
syndicated floating-rate lines of credit of EUR 500 million and EUR 650 million respectively, each
for a term of five years. This is a follow-on arrangement which, under the terms of the agreements,
comes into effect when the present credit line has run out or been canceled or runs out at the time
of pay-out of the new credit line.
In 2011, Hannover Re obtained a credit line in the amount of EUR 773 million in the form of an
unsecured, syndicated guarantee facility to replace the syndicated facilities for letters of credit (LoC)
concluded in 2005 and 2006. The LoC facility runs initially until early 2017 with extension options.
Several other bilateral credit agreements have also been concluded. At the balance-sheet date, the
2005 syndicated facility showed a remaining balance of EUR 27 million after various partial terminations
and runs out completely at the beginning of January 2012. The syndicated LoC line dating
from 2006 has been fully repaid in the course of the refinancing process.
Letter of credit facilities on a bilateral basis are also in place with a number of financial institutions;
these have various terms to at the latest 2021 and a total volume equivalent to EUR 2.4 (1.2) billion.
For further information on the letters of credit, please see our remarks in the section of the Notes
entitled “Other information,” subsection “Contingent liabilities and other financial commitments,”
page 283. A longterm unsecured line of credit with a total volume equivalent to at most EUR 386
(566) million was concluded in December 2009; this is intended specifically for US life reinsurance
business.
A number of the LoC facilities include standard market clauses that allow the banks rights of
cancellation in the event of material changes in the shareholding structure of our Group company
Hannover Re or that trigger a requirement to furnish collateral upon materialisation of certain
major events, for example if its rating is significantly downgraded.