22 Long-term financial liabilities and short-term portions of long-term liabilities

Based on the table used in the Directors’ Report, net financial debt can be broken down as follows:

Long-term financial liabilities

Long-term financial liabilities, including the short-term portions, of €12,049 million (€8,412 million at 31 December 2011) comprise:

The increase of €3,637 million in long-term financial liabilities is due to the combined effect of loans taken out and repayments in 2012.

The loans taken out concerned: (i) the issue of bonds in the nominal amount of €6,000 million; (ii) the disbursement of a syndicated bank loan in the nominal amount of €2,800 million; (iii) the disbursement of eight bilateral bank loans in the overall amount of €2,505 million; (iv) the signature of two loan agreements with CDP on European Investment Bank (EIB) funding, for €300 million and €100 million respectively (both are floating-rate loans falling due on 20 September 2032).

Repayments related only to loans with eni in the amount of €8,412 million (of which €6,500 million was repaid ahead of schedule as a result of the refinancing that followed eni losing control over Snam) and to a loan agreed on EIB funding (€185 million).

Bonds are broken down by issuer, currency, maturity and interest rate as follows:

Financial liabilities with banks (€6,001 million) refer to: (i) revolving credit lines (€3,716 million); (ii) term loans in the amount of €2,285 million, including two loans for €300 million and €100 million disbursed by Cassa Depositi e Prestiti (CDP) on funding from the EIB.

At 31 December 2012, Snam had unused committed lines of revolving credit in the amount of approximately €3.2 billion. There were no breaches of loan agreements at the reporting date.

Long-term financial liabilities (€12,049 million, including the short-term portions) are indicated below with their respective maturities:

The breakdown of long-term financial liabilities by type of interest rate is as follows:

In 2012, Snam secured medium-to-long-term loans from a pool of domestic and international banks, with some of which the Company entered into bilateral loan agreements. The main medium-to-long-term financial debt taken on by Snam in 2012 is subject, inter alia, to standard international market covenants such as, for example, financial covenants, negative pledge clauses, pari passu covenants and change of control clauses.

Specifically, the syndicated loans taken out in July 2012 and most of the bilateral loans are subject, inter alia, to:

- a financial covenant requiring Snam to adhere to a contractually agreed net financial debt/RAB ratio;

- a negative pledge commitment under which Snam and its subsidiaries may not create real guarantees or other liens on all or part of their respective assets, shares, goods and/or documents representing goods. This covenant is subject to certain time frames and to exceptions for expressly permitted liens.

In 2012, Snam also entered into long-term loan agreements with CDP S.p.A. on EIB funding. These loans are subject to obligations in line with the other medium-to-long-term loans described above. The EIB loan, which falls due in 2029, contains contractual clauses in line with those described above, with the exception of financial covenants.

As at 31 December 2012, the financial payables subjected to these restrictive clauses amounted to around €6.3 billion.

Failure to respect these covenants, in some cases only where such failure is not remedied within an agreed time frame, and the occurrence of other events, such as, for example, cross-default, some of which are subject to specific thresholds, may result in non-compliance for Snam and may entail immediate recall of the loan.

The bonds, for a nominal amount of €6,000 million, refer to securities issued under the Euro Medium Term Notes programme.

The programme securities feature standard international market covenants, including, inter alia, negative pledge and pari passu clauses. Pursuant to the negative pledge clause, Snam and its subsidiaries may not respectively create or uphold liens on all or part of their assets or on their income to secure present or future debt, with the exception of expressly permitted circumstances.

Failure to respect these covenants, in some cases only where such failure is not remedied within an agreed time frame, and the occurrence of other events, such as, for example, cross-default, some of which are subject to specific thresholds, may result in non-compliance for Snam and may entail immediate recall of the bond.

Snam complied with all contractually agreed financial covenants throughout 2012.

The market value of long-term financial payables is analysed in Note 28 “Guarantees, commitments and risks”.

Below are the details on net financial debt showing related-party transactions: