14. Held-to-maturity investments
The breakdown of the balance under these headings in the accompanying consolidated balance sheets is as follows:
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| Held-to-Maturity Investments 2012 |
Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Domestic Debt Securities |
|
|
|
|
| Spanish Government and other government agency debt securities | 6,469 | 2 | (406) | 6,065 |
| Other domestic debt securities | 809 | 2 | (27) | 784 |
| Issued by credit institutions | 250 | 2 | (3) | 249 |
| Issued by other institutions | 559 | - | (24) | 535 |
| Subtotal | 7,278 | 4 | (433) | 6,849 |
| Foreign Debt Securities |
|
|
|
|
| Government and other government agency debt securities | 2,741 | 121 | - | 2,862 |
| Other debt securities | 143 | 6 | - | 149 |
| Subtotal | 2,884 | 127 | - | 3,011 |
| Total | 10,162 | 131 | (433) | 9,860 |
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| Held-to-Maturity Investments 2011 |
Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Domestic Debt Securities |
|
|
|
|
| Spanish Government and other government agency debt securities | 6,520 | 1 | (461) | 6,060 |
| Other domestic debt securities | 853 | - | (65) | 788 |
| Issued by credit institutions | 255 | - | (11) | 244 |
| Issued by other institutions | 598 | - | (54) | 544 |
| Subtotal | 7,373 | 1 | (526) | 6,848 |
| Foreign Debt Securities |
|
|
|
|
| Government and other government agency debt securities | 3,376 | 9 | (236) | 3,149 |
| Other debt securities | 206 | 3 | (16) | 193 |
| Subtotal | 3,582 | 12 | (252) | 3,342 |
| Total | 10,955 | 13 | (778) | 10,190 |
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| Held-to-Maturity Investments 2010 |
Millions of Euros | |||
|---|---|---|---|---|
| Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
|
| Domestic Debt Securities |
|
|
|
|
| Spanish Government and other government agency debt securities | 6,611 | 2 | (671) | 5,942 |
| Other domestic debt securities | 892 | - | (63) | 829 |
| Subtotal | 7,503 | 2 | (734) | 6,771 |
| Foreign Debt Securities |
|
|
|
|
| Government and other government agency debt securities | 2,181 | 10 | (20) | 2,171 |
| Other debt securities | 262 | 6 | (21) | 247 |
| Subtotal | 2,443 | 16 | (41) | 2,418 |
| Total | 9,946 | 18 | (775) | 9,189 |
The foreign securities held by the Group as of December 31, 2012, 2011 and 2010 in the held-to-maturity investments portfolio correspond basically to European issuers.
As of December 31, 2012, after analyzing the unrealized losses, it was decided that they were temporary, as the interest payment dates of all the securities have been satisfied, and because there is no evidence that the issuer will not continue to comply with the payment obligations, nor that future payments of both principal and interests will not be sufficient to recover the cost of the debt securities.
The following is a summary of the gross changes in 2012, 2011 and 2010 under this heading in the accompanying consolidated balance sheets:
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| Held-to-Maturity Investments Changes on the Period |
Nots | Millions of Euros | ||
|---|---|---|---|---|
| 2012 | 2011 | 2010 | ||
| Balance at the beginning |
|
10,956 | 9,947 | 5,438 |
| Acquisitions |
|
60 | - | 4,969 |
| Reclassifications |
|
- | 1,817 | - |
| Redemptions and others |
|
(853) | (808) | (460) |
| Balance at the end |
|
10,163 | 10,956 | 9,947 |
| Impairment | 7.1.8 | (1) | (1) | (1) |
| Total |
|
10,162 | 10,955 | 9,946 |
In the third quarter of 2011, some debt securities amounting to €1,817 million were reclassified from "Available-for-sale financial assets" to “Held-to-maturity investments”, as the intention of the Group had changed with respect to some of the sovereign debt securities due to the current market situation (see Note 7.1.5).
Information about the fair value and carrying amounts of these reclassified financial assets is given here:
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| Debt Securities reclassified to "Held to Maturity Investments" | Millions of Euros | |||
|---|---|---|---|---|
| As of Reclassification date (*) | As of December 31, 2012 | |||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | |
| Greece sovereign debt | 1,739 | 1,739 | 1,929 | 1,947 |
| Greece sovereign debt (**) | 56 | 56 | - | - |
| Portugal sovereign debt | 22 | 22 | 15 | 15 |
| Total | 1,817 | 1,817 | 1,944 | 1,962 |
The following table presents the amount recognized in the 2012 BBVA Group Consolidated Income Statement from the valuation at amortized cost of the reclassified financial assets that remained on the consolidated balance sheet as of December 31, 2012, as well as the impact recognized on the income statement and under the heading “Total Equity - Valuation adjustments”, as of December 31, 2012, if the reclassification had not been performed.
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| Effect on Income Statement and Other Comprehensive Income | Millions of Euros | ||
|---|---|---|---|
| Recognized in | Effect of not Reclassifying | ||
|
|
Income Statement | Income Statement | Equity Valuation Adjustments |
| Italy sovereign debt | (18) | - | 18 |
| Portugal sovereign debt | (2) | - | 2 |
| Total | (20) | - | 20 |
As of December 31, 2012, the amount in “Total Equity - Valuation adjustments” pending amortization for the reclassified debt instruments is €55 million.