21 Borrowings

In CHF million  
Notes  31.12.2012 31.12.2011
Hybrid debt
  2 609 2 464
Bank loans
  156 156
Other
  3 4
Total borrowings
33  2 768 2 624


Hybrid debt
In November 2012, Swiss Life Insurance Finance Ltd. offered to existing lenders under the subordinated perpetual step-up loan placed in 1999 by Swiss Life AG to purchase their loan holdings against a consideration consisting of both a cash component and a credit component. Altogether, EUR 265 million and CHF 290 million were purchased from lenders. The cash component amounted to a total of CHF 139 million. The credit component consists of a tranche of a subordinated dated step-up loan newly issued by Swiss Life AG. The subordinated dated step-up loan placed in connection with the offer amounts to CHF 471 million, is guaranteed by Swiss Life Holding, has a tenor of thirty years and is first repayable on 30 November 2022 at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The rate of interest is 6-month Libor plus a margin of 4.20% p.a. until 30 November 2022. If the bonds are not redeemed on 30 November 2022, the margin increases by 1%.

On 22 October 2012, Swiss Life AG issued subordinated perpetual callable bonds in the amount of CHF 300 million. The bonds are guaranteed by Swiss Life Holding, have no fixed maturity date and are first callable on 22 August 2018 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest has been fixed at 5.50% p.a. until 22 August 2018. If the bonds are not redeemed on 22 August 2018, the interest resets at a rate fixed for the subsequent five years, consisting of the aggregate of the then prevailing five-year CHF swap rate and the initial margin of 5.091%.

On 4 April 2011, Swiss Life AG raised CHF 325 million with a placement of subordinated perpetual callable bonds guaranteed by Swiss Life Holding. CHF 75 million was additionally issued in June 2011 and CHF 100 million in October 2011. The bonds have no fixed maturity date but are first callable on 4 October 2016 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest has been fixed for the first five and a half years at 5.25% p.a. If the bonds are not redeemed on 4 October 2016, the interest resets at a rate fixed for the subsequent five years, consisting of the aggregate of the then prevailing five-year CHF swap rate and the initial margin of 3.551%.

On 12 April 2007, ELM B.V., a Dutch repackaging vehicle, issued EUR 700 million in fixed/floating rate subordinated perpetual notes at a price of par to finance loan notes granted to Swiss Life AG, which are guaranteed by Swiss Life Holding. Swiss Life AG may repay the loan notes in full on 12 April 2017 or on any interest payment date thereafter, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The notes bear interest from 12 April 2007 to 12 April 2017 at a rate of 5.849% p.a. If the notes are not redeemed on 12 April 2017, the interest will be the aggregate of Euribor 3-month deposits and a margin of 2.5%.

On 16 November 2005, J.P. Morgan Bank Luxembourg S.A. issued on a fiduciary basis EUR 350 million fixed/floating rate subordinated perpetual notes at a price of 99.423% to fund a loan made by it to Swiss Life AG. Swiss Life AG may repay the loan in full on 16 November 2015 or on any interest payment date thereafter, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The notes bear interest from 16 November 2005 to 16 November 2015 at a rate of 5% p.a. If the notes are not redeemed on 16 November 2015, the interest rate will be the aggregate of Euribor for 3-month deposits and a margin of 2.43%.

In March 1999, Swiss Life AG privately placed a subordinated perpetual step-up loan comprising three simultaneous advances of EUR 443 million (at a rate of interest of Euribor plus a margin of 1.05%, increasing by 100 basis points as from April 2009), CHF 290 million (at a rate of interest of Libor plus a margin of 1.05%, increasing by 100 basis points as from April 2009) and EUR 215 million (at a rate of interest of 5.3655%, as from October 2009 the rate of interest is the aggregate of Euribor plus a margin of 2.05%). In 2009, Swiss Life AG renounced the right to call the loan on its first call date. Following the purchase offer by Swiss Life Insurance Finance Ltd. in 2012, EUR 192 million remain outstanding. Swiss Life AG can next call the outstanding loan on 6 April 2014 or at five-year intervals thereafter, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority.

Amounts in CHF million (if not noted otherwise)  
  Nominal value
in year of issue
Nominal value
at 31.12.2012

Interest rate

Year of issue
Optional
redemption
Carrying
amount
Carrying
amount
Issuer   31.12.2012 31.12.2011
  Libor
Swiss Life AG
  CHF 471 CHF 471 +4.200% 2012 2022 467
Swiss Life AG
  CHF 300 CHF 300 5.500% 2012 2018 297
Swiss Life AG
  CHF 500 CHF 500 5.250% 2011 2016 492 490
Swiss Life AG 1
  EUR 700 EUR 590 5.849% 2007 2017 710 715
Swiss Life AG 2
  EUR 350 EUR 343 5.000% 2005 2015 410 412
  Euribor
Swiss Life AG
  EUR 443 EUR 192 +2.050% 1999 2014 232 538
  Libor
Swiss Life AG
  CHF 290 +2.050% 1999 2014 290
  Euribor
Swiss Life AG
  EUR 215 +2.050% 1999 2014 19
Total
  2 609 2 464
1 Hybrid loan notes granted by ELM B.V.
2 Hybrid bank loan originally granted by J.P. Morgan Bank Luxembourg S.A.


Bank loans
Bank loans relate to mortgage loans for real estate acquired in 2011.

Amounts in CHF million  
 
Currency

Interest rate

Maturity
Carrying
amount
Carrying
amount
Type   31.12.2012 31.12.2011
Mortgage loan
  CHF 3.165% 2016 156 156
Total
  156 156


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