VINCI - 2005 annual report

26.2.3 Management of financial covenants
There are no financial covenants for the medium-term credit facilities
(syndicated or individual) mentioned in Notes 25.3.1 b. and c., except
for the acquisition loan of €4.2 billion for which VINCI has undertaken
to comply with a minimum ratio between the net financial debt of non-
26.2.4 Financial ratings
The ratings of VINCI and Cofiroute at 31 December 2005 are as follows (see Key Events §5):
(in € millions) 31/12/2005 31/12/2004
Euro 5,377.3 89.7% 6,195.8 92.9%
Chilean peso 330.6 5.5% 187.8 2.8%
Canadian dollar 137.9 2.3% 107.0 1.6%
Sterling 80.4 1.3% 113.1 1.7%
US dollar 32.9 0.5% 19.1 0.3%
Other 34.9 0.6% 44.0 0.7%
Total long-term debt 5,993.9 100.0% 6,666.8 100.0%
252
VINCI 2005 ANNUAL REPORT
concession activities and the cash flows from operations generated by
those activities plus the dividends received by holding companies from
the Concessions business lines.
Agency Rating
Long-term Outlook Short-term Outlook
VINCI SA Standard & Poor’s BBB+ Negative A2 Stable
Moody’s Baa1 Stable P2 Stable
Cofiroute Standard & Poor’s A Negative A1 Negative
26.3 CURRENCY RISK
26.3.1 Nature of the Group’s risk exposure
Approximately 80% of VINCI’s industrial and commercial activities in
foreign markets are through subsidiaries in the eurozone. In consequence,
the Group’s exposure to currency risk is limited. Transactions outside the
eurozone are generally made in the local currency for permanent establishments
and, to a great extent, in a strong currency in the case of major
export projects.
26.3.2 Breakdown of long-term debt by currency
The currency debts outstanding are as follows:
The outstanding debt in Chilean pesos corresponds mainly to the financing,
as part of a securitisation of debts, of prisons by VINCI Construction
Grands Projets (€95 million at 31 December 2005) and the bond issue
Generally, the Group’s activities in foreign countries are financed by loans
in the local currency.
Nevertheless, VINCI can find itself exposed to currency risk whenever, in
isolated cases, the parent company provides finance to certain foreign
subsidiaries; these risks are then systematically hedged by cross currency
swaps or forward foreign exchange transactions.
by the Chilean concession operator Autopista del Bosque (€233 million
at 31 December 2005). This bond is indexed to the local inflation rate.
The cost of this indexation is - €6.9 million in 2005.