2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 28.1. Change in gross financial debt€ millions 2010 2009At 1 January 7,079 6,993Fair value hedges (assets) (292) (195)Financial debt at 1 January (including hedging instruments) 6,787 6,799New borrowings (1) 803 1,789Repayments (principal and interest) (660) (1,444)Change in fair value of debt hedged (7) 35Exchange differences 117 123Change in scope of consolidation 23 42Change in put options granted to owners of non-controlling interests (2) (23) (555)Financial debt at 31 December (including hedging instruments) 7,040 6,787Gross financial liabilities at 31 December 7,303 7,079Fair value hedges (assets) (262) (292)(1) New borrowings stem mainly from the following transactions:• Bond exchange offers in 2010On 8 February and 11 May 2010, the Group made two bond exchange offers, reducing its 2011, 2012 and 2013 maturities by €190 million, €596 million and €481 million respectively (seenote 2.2).The two new issues were for €888 million and €508 million maturing in 2017 and 2018 respectively. Their effective interest rate is 5.85% and 5.25% respectively.The accounting treatment for the two exchanges was analysed in light of the criteria set out in IAS 39 on the derecognition of fi nancial liabilities. After analysis, they were treated as a rolloverof fi nancial liabilities as the revisions to the contractual terms and conditions were not deemed to be substantial. The impact of the exchange is treated as an adjustment to the carryingamount of the 2017 and 2018 bond issues and is amortised on an actuarial basis over the remaining term of the liability as adjusted. The same accounting treatment is applied to premiumsand unamortised issue expenses related to the exchanges, which will be amortised until 2017 and 2018 respectively. The impact of unwinding hedges of the original liabilities will also beamortised over the term of the new liabilities.• Financing transaction through Alamea InvestmentsIn April 2010, the Group raised €300 million through a fi ve-year fi nancing facility from Alamea Investments, a Luxembourg company 95%-owned by a bank and 5% by the Group. AlameaInvestments is a special purpose entity and has been fully consolidated due to the way it is structured.The portion of the issue fi nanced by external investors is in substance external debt and is included in other borrowings and fi nancial liabilities.(2) The 2010 change in put options granted to owners of non-controlling interests concerns Franprix-Leader Price. The 2009 change in put options granted to owners of non-controlling interestsconcerns Franprix-Leader Price for €407 million, Exito (Carulla) for €118 million and GPA for €30 million.Note 28.2. BondsThe Group has a €8 billion EMTN (Euro Medium Term Notes)programme, which was signed and approved by Luxembourg’s CSSF(Commission de Surveillance du Secteur Financier) on 25 October2010. The programme expires on 25 October 2011. At 31 December2010, notes issued under the programme totalled €4,355 million. Thenotes are rated BBB- by Standard & Poor’s and Fitch Ratings andare not subject to any financial covenants.Notes issued and due in August 2012, April 2013, April 2014, January2015, February 2017 and November 2018 are subject to a redemptionoption at the investor’s discretion should the notes be downgradedto non-investment grade following a change of control.With the exception of the notes due April 2014, they are also subjectto a “step up” clause should the rating be downgraded to noninvestment grade.The notes are recognised and measured in the balance sheet atamortised cost based on the effective interest rate, taking accountof the adjustment in fair value arising from the hedging relationshipdocumented in accordance with IAS 39. The interest is recognisedin “Other financial liabilities”.104 Casino Group | Registration Document 2010