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Note 22. Financial instruments and management of financial risks
22.2.3.
Interest rate risk management
Vivendi’s interest rate risk management seeks to reduce its net exposure
to interest rate increases. Therefore, Vivendi uses pay-floating and pay-
fixed interest rate swaps. These instruments enable thus the group to
manage and reduce volatility for future cash flows related to interest
payments on borrowings.
In December 2014, concomitantly with the redemption of the bonds
with make-whole option, Vivendi early settled pay-floating interest
rate swaps with a notional amount of €750 million and €400 million.
As of December 31, 2014, the portfolio of Vivendi’s interest rate hedging
instruments included the following swaps:
p
p
pay-fixed interest rate swaps with a notional amount of €450 million,
maturing in 2017, set up in 2012;
p
p
pay-floating interest rate swaps with a notional amount of
€450 million, maturing in 2017, set up in 2010; and
p
p
pay-floating interest rate swaps with a notional amount of
€1,000 million, maturing in 2016, set up in 2011.
(in millions of euros)
December 31, 2014
Notional amounts
Fair value
Total
2015
2016
2017
2018
2019
After
2019 Assets Liabilities
Pay-fixed interest rate swaps
450
450
-
(12)
Pay-floating interest rate swaps
(1,450)
(1,000)
(450)
75
-
Net position at fixed interest rate
(1,000)
(1,000)
(a)
-
75
(12)
Breakdown by accounting category of rate hedging
instruments
Cash fow hedge
-
-
-
Fair value hedge
(1,000)
(1,000)
35
-
Economic hedging
(b)
-
(a)
-
40
(12)
(in millions of euros)
December 31, 2013
Notional amounts
Fair value
Total
2014
2015
2016
2017
2018
After
2018 Assets Liabilities
Pay-fixed interest rate swaps
450
450
-
(7)
Pay-floating interest rate swaps
(2,600)
(1,400)
(450)
(750)
88
-
Net position at fixed interest rate
(2,150)
(1,400)
(a)
-
(750)
88
(7)
Breakdown by accounting category of rate hedging
instruments
Cash fow hedge
-
-
-
Fair value hedge
(2,150)
(1,400)
(750)
46
-
Economic hedging
(b)
-
(a)
-
42
(7)
(a)
Includes pay-floating interest rate swaps for a notional amount of €450 million as well as pay-fixed interest rate swaps for a notional amount of
€450 million, maturing in 2017, qualified as economic hedges.
(b)
The economic hedging instruments relate to derivative financial instruments which are not eligible for hedge accounting pursuant to IAS 39.
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