Honda 2008 Annual Report Download - page 83

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A n n u a l R e p o r t 2 0 0 8 8 1
The loans maturing through 2031 and through 2030 are
either secured by property, plant and equipment or subject
to collateralization upon request, and their interest rates
range from 0.69% to 12.54% per annum at March 31, 2008
and weighted average interest rate on total outstanding long-
term debt at March 31, 2007 and 2008 is 3.96% and 4.11%,
respectively. Property, plant and equipment with a net book
value of approximately ¥23,654 million and ¥26,564 million
($265 million) at March 31, 2007 and 2008, respectively,
were subject to specific mortgages securing indebtedness.
Furthermore, finance subsidiaries—receivables of
approximately ¥1,931 million at March 31, 2007 were
pledged as collateral by a financial subsidiary for certain
loans. There is no collateral pledged at March 31, 2008.
Medium-term notes are unsecured, and their interest
rates range from 0.77% to 5.38% at March 31, 2007 and
from 1.03% to 5.39% at March 31, 2008.
The following schedule shows the maturities of long-term debt for each of the five years following March 31, 2008 and
thereafter:
Years ending March 31:
Yen
(millions)
2009 ¥ 871,050
2010 769,785
2011 470,819
2012 268,981
2013 295,935
After five years 31,132
1,836,652
Total ¥ 2,707,702
Certain of the Company’s subsidiaries have entered
into currency swap and interest rate swap agreements for
hedging currency and interest rate exposures resulting from
the issuance of long-term debt. Fair value of contracts
related to currency swaps and interest rate swaps is
included in other assets and other current assets and/or
liabilities in the consolidated balance sheets, as appropriate
(see note 16). Unless a right of setoff exists, the offsetting of
assets and liabilities is not made in the consolidated balance
sheets.
At March 31, 2008, Honda had unused line of credit
facilities amounting to ¥938,591 million ($9,368 million), of
which ¥409,971 million ($4,092 million) related to commercial
paper programs and ¥528,620 million ($5,276 million) related to
medium-term notes programs. Honda is authorized to obtain
financing at prevailing interest rates under these programs.
At March 31, 2008, Honda also had committed lines of
credit amounting to ¥923,379 million ($9,216 million), none of
which was in use. The committed lines are used to back up
the commercial paper programs. Borrowings under those
committed lines of credit generally are available at the prime
interest rate.
As is customary in Japan, both short-term and long-term
bank loans are made under general agreements which
provide that security and guarantees for present and future
indebtedness will be given upon request of the bank, and
that the bank shall have the right to offset cash deposits
against obligations that have become due or, in the event
of default, against all obligations due to the bank. Certain
debenture trust agreements provide that Honda must give
additional security upon request of the trustee.