REG - Legal & General Grp - L&G FY 2014 results part 3 <Origin Href="QuoteRef">LGEN.L</Origin> - Part 3
04/03/2015 07:12
- Part 3: For the preceding part double click ID:nRSD4570Gb
equity but exclude hedge funds.
2. Traded securities are defined by exclusion. If an instrument is not a Direct Investment, then it is classed as a traded security.
(b) Analysed by segment
LGR LGC LGA LGAS Total
2014 2014 2014 2014 2014
£m £m £m £m £m
Equities - 318 - - 318
Bonds 2,586 168 229 - 2,983
Property 1,879 147 - 4 2,030
Cash (including cash
equivalents), loans & receivables - 54 187 - 241
Other assets 118 13 - - 131
4,583 700 416 4 5,703
LGR LGC LGA LGAS Total
2013 2013 2013 2013 2013
£m £m £m £m £m
Equities - 202 - - 202
Bonds 997 - 51 - 1,048
Property 1,294 149 - 4 1,447
Cash (including cash
equivalents), loans & receivables - - 6 - 6
Other assets 176 - - - 176
2,467 351 57 4 2,879
(c) Movement in the year
Carrying Change in Carrying
value market value
01.01.14 Additions Disposals value Other 31.12.14
£m £m £m £m £m £m
Equities 202 132 (31) 18 (3) 318
Bonds 1,048 1,629 (82) 202 186 2,983
Property 1,447 794 (256) 45 - 2,030
Cash (including cash
equivalents), loans & receivables 6 230 (1) 6 - 241
Other assets 176 13 - 2 (60) 131
2,879 2,798 (370) 273 123 5,703
Capital and Investments
75
4.05 Bond portfolio summary
(a) Analysed by sector
LGR LGR Total Total
2014 2014 2014 2014
Note £m % £m %
Sovereigns, Supras and Sub-Sovereigns 4.05(b) 7,760 19 9,249 20
Banks:
- Tier 1 24 - 26 -
- Tier 2 and other subordinated 559 1 621 1
- Senior 1,667 4 2,221 5
Financial Services:
- Tier 1 - - - -
- Tier 2 and other subordinated 96 - 132 -
- Senior 946 2 1,138 3
Insurance:
- Tier 1 128 - 129 -
- Tier 2 and other subordinated 363 1 375 1
- Senior 624 2 704 2
Utilities 5,561 14 5,824 13
Consumer Services and Goods & Health Care 4,126 10 4,726 10
Technology and Telecoms 2,548 6 2,836 6
Industrials & Oil and Gas 4,306 11 4,928 11
Property 1,882 5 2,126 5
Asset backed securities:1
- Traditional 722 2 1,234 3
- Securitisations and debentures 8,305 20 8,422 18
CDOs2 1,120 3 1,120 2
Total 40,737 100 45,811 100
1. Traditional asset backed securities are securities,
often with variable expected redemption profiles issued
by Special Purpose Vehicles and typically backed by
pools of receivables from loans or personal credit.
Securitisations are securities with fixed redemption
profiles that are issued by Special Purpose Vehicles and
secured on revenues from specific assets or operating
companies and debentures are securities with fixed
redemption profiles issued by firms typically secured on
property.
2. The underlying reference portfolio has had no
reference entity defaults in 2014. The CDOs are termed
as super senior since default losses on the reference
portfolio have to exceed 27.5%, on average across the
reference portfolio, before the CDOs incur any default
losses. Assuming an average recovery rate of 30%, then
over 39% of the reference names would have to default
before the CDOs incur any default losses. The CDOs are
valued using an external valuation which is based on
observable market inputs. This is then validated against
the market valuation.
Capital and Investments
76
4.05 Bond portfolio summary (continued)
(a) Analysed by sector (continued)
LGR LGR Total Total
2013 2013 2013 2013
Note £m % £m %
Sovereigns, Supras and Sub-Sovereigns 4.05(b) 4,772 16 6,502 18
Banks:
- Tier 1 100 - 105 -
- Tier 2 and other subordinated 637 2 698 2
- Senior 1,406 5 2,169 6
Financial Services:
- Tier 1 2 - 5 -
- Tier 2 and other subordinated 206 1 251 1
- Senior 800 3 1,041 3
Insurance:
- Tier 1 144 1 152 -
- Tier 2 and other subordinated 579 2 625 2
- Senior 481 2 552 2
Utilities 4,013 13 4,329 12
Consumer Services and Goods & Health Care 3,128 10 3,716 10
Technology and Telecoms 1,995 7 2,333 7
Industrials & Oil and Gas 3,074 10 3,626 10
Property 981 3 1,053 3
Asset backed securities:1
- Traditional 763 3 1,395 4
- Securitisations and debentures 5,839 19 6,047 17
CDOs2 1,098 3 1,098 3
Total 30,018 100 35,697 100
1. Traditional asset backed securities are securities,
often with variable expected redemption profiles issued
by Special Purpose Vehicles and typically backed by
pools of receivables from loans or personal credit.
Securitisations are securities with fixed redemption
profiles that are issued by Special Purpose Vehicles and
secured on revenues from specific assets or operating
companies and debentures are securities with fixed
redemption profiles issued by firms typically secured on
property.
2. The underlying reference portfolio has had no
reference entity defaults in 2013. The CDOs are termed
as super senior since default losses on the reference
portfolio have to exceed 27.5%, on average across the
reference portfolio, before the CDOs incur any default
losses. Assuming an average recovery rate of 30%, then
over 39% of the reference names would have to default
before the CDOs incur any default losses. The CDO's are
valued using an external valuation which is based on
observable market inputs. This is then validated against
the market valuation.
Capital and Investments
77
4.05 Bond portfolio summary (continued)
(b) Analysed by domicile
The tables below are based on the legal domicile of the security:
LGR Total LGR Total
2014 2014 2013 2013
£m £m £m £m
Market value by region:
United Kingdom 20,055 21,021 13,099 14,178
USA 9,515 11,839 7,237 9,779
Netherlands 1,910 2,182 1,736 2,164
France 1,412 1,726 1,382 1,681
Germany 378 682 411 791
Greece - - - -
Ireland 276 303 234 271
Italy 301 429 636 786
Portugal 1 11 15 31
Spain 212 260 178 263
Russia 19 37 - 1
Rest of Europe 1,857 2,164 1,299 1,720
Brazil 139 157 83 86
Rest of World 3,542 3,880 2,610 2,848
CDOs 1,120 1,120 1,098 1,098
Total 40,737 45,811 30,018 35,697
Additional analysis of sovereign debt exposures
Sovereigns, Supras and Sub-Sovereigns
LGR Total LGR Total
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