Annual report and accounts 2008

Notes contentsNotes to consolidated financial statements

18. Financial liabilities – Borrowings

The Group’s current and non-current borrowings are as follows:

All figures in £ millions	2008	2007
Non-current
Bank loans and overdrafts	132	—
4.7% US Dollar Bonds 2009 (nominal amount $350m)	—	176
7% Global Dollar Bonds 2011 (nominal amount $500m)	368	264
5.5% Global Dollar Bonds 2013 (nominal amount $350m)	258	—
5.7% US Dollar Bonds 2014 (nominal amount $400m)	322	211
7% Sterling Bonds 2014 (nominal amount £250m)	254	251
6.25% Global Dollar Bonds 2018 (nominal amount $550m)	445	—
4.625% US Dollar notes 2018 (nominal amount $300m)	237	143
Finance lease liabilities	3	4
	2,019	1,049
Current
Due within one year or on demand:
Bank loans and overdrafts	96	444
10.5% Sterling Bonds 2008 (nominal amount £100m)	—	105
4.7% US Dollar Bonds 2009 (nominal amount $350m)	244	—
Loan notes	—	8
Finance lease liabilities	4	2
	344	559
Total borrowings	2,363	1,608

Included in the non-current borrowings above is £12m of accrued interest (2007: £6m). Included in the current borrowings above is £1m of accrued interest (2007: £7m).

The maturity of the Group’s non-current borrowing is as follows:

All figures in £ millions	2008	2007
Between one and two years	2	178
Between two and five years	759	266
Over five years	1,258	605
	2,019	1,049

The carrying amounts and market values of borrowings are as follows:

All figures in £ millions	Effective interest rate		2008		2007
		Carrying value	Market value	Carrying value	Market value
Bank loans and overdrafts	n/a	228	228	444	444
Loan notes	n/a	—	—	8	8
10.5% Sterling Bonds 2008	10.53%	—	—	105	102
4.7% US Dollar Bonds 2009	4.86%	244	243	176	176
7% Global Dollar Bonds 2011	7.16%	368	349	264	267
5.5% Global Dollar Bonds 2013	5.76%	258	227	—	—
5.7% US Dollar Bonds 2014	5.88%	322	262	211	203
7% Sterling Bonds 2014	7.20%	254	258	251	261
6.25% Global Dollar Bonds 2018	6.46%	445	352	—	—
4.625% US Dollar notes 2018	4.69%	237	169	143	135
Finance lease liabilities	n/a	7	7	6	6
		2,363	2,095	1,608	1,602

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	2008	2007
US dollar	2,081	1,251
Sterling	277	357
Euro	5	—
	2,363	1,608

The Group has the following undrawn capacity on its committed borrowing facilities as at 31 December:

All figures in £ millions	2008	2007
Floating rate
— expiring within one year	—	—
— expiring beyond one year	1,085	1,007
	1,085	1,007

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	2008	2007
Finance lease liabilities — minimum lease payments
Not later than one year	4	2
Later than one year and not later than two years	2	2
Later than two years and not later than three years	1	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	7	6

The present value of finance lease liabilities is as follows:

All figures in £ millions	2008	2007
Not later than one year	4	2
Later than one year and not later than five years	3	4
Later than five years	—	—
	7	6

The carrying amounts of the Group’s lease obligations approximate their fair value.