Strategic debt
We define as strategic debt all borrowing with the character of outside financing that does not have a direct link with our operative business. It supplements our equity and is essentially designed to reduce the cost of capital and ensure that we have sufficient liquidity at all times.
Our strategic debt as at 31 December 2007 is made up as follows:
|
All figures in €m
|
31.12.2007
|
Prev. year
|
|
Subordinated bonds of Munich Reinsurance Company, Munich (until December 2007, of Munich Re Finance B. V., Amsterdam)
|
3,385 |
3,419 |
|
Subordinated bonds of Munich Reinsurance Company, Munich
|
1,492 |
– |
|
Senior notes of Munich Re America Corporation, Princeton
|
341 |
378 |
|
Bank borrowing of Munich Re America Corporation, Princeton
|
171 |
190 |
|
Other
|
54 |
72 |
|
Total
|
5,443
|
4,059
|
As at 31 December 2007, our debt leverage was 17.6%, up 4.2 percentage points on the previous year.
|
All figures in €m
|
31.12.2007
|
Prev. year1
|
|
Strategic debt
|
5,443 |
4,059 |
|
Group equity
|
25,458 |
26,320 |
|
Total
|
30,901
|
30,379
|
|
Debt leverage
|
17.6%
|
13.4%
|
|
1 Adjusted pursuant to IAS 8.
|
If the own funds recognised under supervisory law are taken as the basis instead of the balance sheet equity, the strategic debt is reduced to €2,135m. This results in a debt leverage of 6.9%.