Food Lion 2012 Annual Report Download - page 128
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126 // DELHAIZE GROUP FINANCIAL STATEMENTS’12
operations also entered into cross-currency interest rate swaps, exchanging the principal amounts (€500 million for $670 million)
and interest payments (both variable), in order to cover the foreign currency exposure of the entity in connection with the
transaction described above. Delhaize Group did not apply hedge accounting to this transaction because this swap constitutes
an economic hedge with Delhaize America, LLC’s underlying €500 million term loan.
Also, Delhaize Group enters into foreign currency swaps with various commercial banks to hedge foreign currency risk on
intercompany loans denominated in currencies other than its reporting currency.
The table below indicates the principal terms of the currency swaps outstanding at December 31, 2012. Changes in fair value of
these swaps are recorded in “Finance costs” or “Income from investments” in the income statement:
(in millions)
Foreign Currency Swaps
Year Trade
Date
Year
Expiration
Date
Amount
Received
from Bank at
Trade Date,
and to be
Delivered to
Bank at
Expiration
Date
Interest Rate
Amount
Delivered to
Bank at
Trade Date,
and to
Receive from
Bank at
Expiration
Date
Interest Rate
Fair Value
Dec. 31,
2012 (€)
Fair Value
Dec. 31,
2011 (€)
Fair Value
Dec. 31,
2010 (€)
2012
2019
€225
3m EURIBOR
+2.06%
$300
3m LIBOR
+2.31%
1
—
—
2012
2013
€ 30
12m EURIBOR
+3.77%
$ 40
12m LIBOR
+3.85%
—
—
—
2012
2013
€1
12m EURIBOR
+4.30%
$ 1
12m LIBOR
+4.94%
—
—
—
2011
2012
€12
12m
EURIBOR
+4.83%
$17
12m LIBOR
+4.94%
—
1
—
2010
2011
€53
6m EURIBOR
+3.33%
$75
6m LIBOR
+3.40%
—
—
3
2010
2011
€26
12m
EURIBOR
+5.02%
$35
12m LIBOR
+4.94%
—
—
1
2009
2014
€76
6.60%
$100
5.88%
(4)(1)
(11)
(13)
2007
2014
$670
3m LIBOR
+0.98%
€500
3m EURIBOR
+0.94%
(6)
(9)
(2)
_______________
(1) As of December 31, 2012, $100 million €76 million remained outstanding from the $300 million/€228 million currency swap. Following the redemption on the $300
million senior notes due 2014, the remaining outstanding amount of this swap was unwound and settled on January 3, 2013.
Debt Covenants for Derivatives
The Group has several ISDAs in place containing customary provisions related to events of default and restrictions in terms of
sale of assets, merger and rating.
The maximum exposure of derivative financial instruments to credit risk at the reporting date equals their carrying values at
balance sheet date (i.e., €61 million at December 31, 2012). See Note 12 in connection with collateral posted on derivative
financial liabilities.