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Notes to the Consolidated Financial Statements

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.

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