Credit risk

Credit risk

Enel manages credit risk by operating solely with counterparties considered solvent by the market, i.e. those with high credit standing, and does not have any concentration of credit risk. 

As regards the credit risk generated by open positions in financial derivatives, the Company has entered into margin agreements (Credit Support Annexes) with its main counterparties that call for the exchange of cash collateral, which significantly mitigates the exposure to counterparty risk. More specifically, under such agreements the counterparties establish dedicated interest-bearing deposit accounts on which they balance the current creditor exposure (net positive fair value of the derivatives portfolio) with the positive balance on the account. The amounts actually exchanged between the counterparties are determined on the basis of the change in the net fair value of the position in respect of contractually specified thresholds for the minimum unsecured exposure and the minimum margin payment.

A composite quantitative overview if the exposure to credit risk can be drawn from the carrying amount of financial assets gross of their provision for impairment and of transactions with Group companies, in addition to derivatives with a positive fair value, net of any cash collateral.

At December 31, 2009, the exposure to credit risk amounted to €23,447.5 million (€38,997.1 million at December 31, 2008). Of the total, €21,032.9 million regard exposures in respect of Group companies.