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21. Financial liabilities – Borrowings
The Group’s current and non-current borrowings are as follows:
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| Non-current | ||
| 10.5% Sterling Bonds 2008 (nominal amount £100m) | – | 105 |
| 4.7% US Dollar Bonds 2009 (nominal amount $350m) | 176 | 178 |
| 7% Global Dollar Bonds 2011 (nominal amount $500m) | 264 | 266 |
| 7% Sterling Bonds 2014 (nominal amount £250m) | 251 | 251 |
| 5.7% US Dollar Bonds 2014 (nominal amount $400m) | 211 | 206 |
| 4.625% US Dollar notes 2018 (nominal amount $300m) | 143 | 139 |
| Finance lease liabilities | 4 | 3 |
| 1,049 | 1,148 | |
| Current | ||
| Due within one year or on demand: | ||
| Bank loans and overdrafts | 444 | 173 |
| 6.125% Euro Bonds 2007 (nominal amount €591m) | – | 421 |
| 10.5% Sterling Bonds 2008 (nominal amount £100m) | 105 | – |
| Loan notes | 8 | – |
| Finance lease liabilities | 2 | 1 |
| 559 | 595 | |
| Total borrowings | 1,608 | 1,743 |
Included in the non-current borrowings above is £6m of accrued interest (2006: £12m). Included in the current borrowings above is £7m of accrued interest (2006: £22m).
The maturity of the Group’s non-current borrowing is as follows:
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| Between one and two years | 178 | 107 |
| Between two and five years | 266 | 445 |
| Over five years | 605 | 596 |
| 1,049 | 1,148 |
As at 31 December 2007 the exposure of the borrowings of the Group to interest rate changes when the borrowings re-price is as follows:
| All figures in £ millions | Less than one year |
One to five years |
More than five years |
Total |
|---|---|---|---|---|
| Carrying value of borrowings | 559 | 444 | 605 | 1,608 |
| Effect of rate derivatives | 359 | (7) | (352) | – |
| 918 | 437 | 253 | 1,608 |
The carrying amounts and market values of non-current borrowings are as follows:
| All figures in £ millions | Effective interest rate |
Carrying amount 2007 |
Market value 2007 |
Carrying amount 2006 |
Market value 2006 |
|---|---|---|---|---|---|
| 10.5% Sterling Bonds 2008 | 10.53% | – | – | 105 | 106 |
| 4.7% US Dollar Bonds 2009 | 4.86% | 176 | 176 | 178 | 176 |
| 7% Global Dollar Bonds 2011 | 7.16% | 264 | 267 | 266 | 269 |
| 7% Sterling Bonds 2014 | 7.20% | 251 | 261 | 251 | 265 |
| 5.7% US Dollar Bonds 2014 | 5.88% | 211 | 203 | 206 | 203 |
| 4.625% US Dollar notes 2018 | 4.69% | 143 | 135 | 139 | 135 |
| Finance lease liabilities | n/a | 4 | 4 | 3 | 3 |
| 1,049 | 1,046 | 1,148 | 1,157 |
The market values are based on clean market prices at the year end or, where these are not available, on the quoted market prices of comparable debt issued by other companies. The effective interest rates above relate to the underlying debt instruments.
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| US dollar | 1,251 | 966 |
| Sterling | 357 | 356 |
| Euro | – | 421 |
| 1,608 | 1,743 |
The Group has the following undrawn committed borrowing facilities as at 31 December:
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| Floating rate | ||
| – expiring within one year | – | – |
| – expiring beyond one year | 1,007 | 894 |
| 1,007 | 894 |
During the year, the Group extended the maturity date of its main revolving credit facility by one year, and also entered into a short-term bridge financing facility.
In addition to the above facilities, there are a number of short-term facilities that are utilised in the normal course of business.
All of the Group’s borrowings are unsecured. In respect of finance lease obligations, the rights to the leased asset revert to the lessor in the event of default.
The maturity of the Group’s finance lease obligations, is as follows:
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| Finance lease liabilities – minimum lease payments | ||
| Not later than one year | 2 | 1 |
| Later than one year and not later than two years | 2 | 3 |
| Later than two years and not later than three years | 1 | – |
| Later than three years and not later than four years | 1 | – |
| Later than four years and not later than five years | – | – |
| Later than five years | – | – |
| Future finance charges on finance leases | – | – |
| Present value of finance lease liabilities | 6 | 4 |
The present value of finance lease liabilities is as follows:
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| Not later than one year | 2 | 1 |
| Later than one year and not later than five years | 4 | 3 |
| Later than five years | – | – |
| 6 | 4 |
The carrying amounts of the Group’s lease obligations approximate their fair value.