Hyundai 2008 Annual Report Download - page 64

HYUNDAI MOTOR COMPANY
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HYUNDAI MOTOR COMPANY
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HYUNDAI MOTOR COMPANY I 2008 AnnuAl RepoRt I HYUNDAI MOTOR COMPANY I 2008 AnnuAl RepoRt I 
(11) Hyundai Capital Co., Ltd made a Revolving Credit Facility Agreement with the following financial institutions for Credit Line:
(12) Hyundai Card Co., Ltd., one of domestic subsidiaries of the Company, made an agreement regarding asset backed securitization. According to the agreement, in
order for the credibility of the asset-backed securities, several required provisions are made as a trigger clauses to be used for early redemption calls, thereby
limiting the risk that investors will have resulting from a change in quality of the assets in the future. In the event the asset-backed securitization of the Hyundai
Card Co., Ltd. is in violation of the applicable trigger clause, Hyundai Card Co., Ltd. is obliged to make early redemption for asset-backed securities.
(13) WIA Corp., one of domestic subsidiaries of the Company, made a general installment financing contract with Doosan Capital Co., Ltd. and Hyundai Commercial
in order to promote the sales of its machine tools. According to the contract, if a user of the instalment financing service is in default, WIA Corp. has to accept
responsibility for the default receivable. The amounts of principal that have not matured are
￦
30,456 million (US$24,219 thousand) and
￦
109,559 million
(US$87,124 thousand) for Doosan Capital Co., Ltd. and Hyundai Commercial, respectively. The ceiling amounts are
￦
150,000 million (US$119,284 thousand) and
￦
34,000 million (US$27,038 thousand) for Doosan Capital Co., Ltd. and Hyundai Commercial, respectively, as of December 31, 2008.
(10) Hyundai Capital Co., Ltd., one of domestic subsidiaries of the Company, made a credit facility agreement on a US$ 600 million renewable one-year revolving
credit facility up to 3 years to be provided by General Electric Capital Corporation (the “GECC”) to Hyundai Capital Co., Ltd. on January 13, 2006. Under the terms
of such agreement, Hyundai Capital Co., Ltd. shall pay commitment fee of Libor+90bp for the usage of facility and 20bp for the remaining. Also, the maturity of
individual draw-down is within 1 year from the time of withdrawal and in case of termination, the maturity for previous withdrawals can be extended to 1 year
from the time of termination. In addition, Hyundai Capital Co., Ltd, GECC and the Company made a support agreement on credit facility agreement on the same
date of the credit facility agreement. According to the support agreement, when Hyundai Capital Co., Ltd cannot redeem in a year after the withdrawal, GECC has
the right of debt-to-equity swap for the relevant draw-down and has the put option that GECC can sell converted stocks to the Company within the ownership of
the Company. In this case, the amount which the Company pays to GECC is the amount of withdrawal for debt-to-equity swap multiplied by the ownership of
the Company. Also, the Company has the call option that it can buy converted stocks from GECC on the same condition of put option when the GECC does not
exercise the put option. According to the support agreement, Hyundai Capital Co., Ltd is supposed to pay 15bp commission to the Company based on the amount
on which the credit facility agreement was established multiplied by the ownership percentage of the company.
Financial institution Credit Line Commission Contract term

  

 

 

 

 

 

 

 

 

 
29. DERIVATIVE INSTRUMENTS:
(1) The Company entered into derivative instrument contracts including forwards, options and swaps to hedge the exposure to changes in foreign exchange rate.
As of December 31, 2008 and 2007, the Company deferred the net loss of
￦
226,514 million (US$180,130 thousand) and
￦
28,527 million (US$22,685 thousand),
respectively, on valuation of the effective portion of derivative instruments for cash flow hedging purposes from forecasted exports as accumulated other
comprehensive income (loss). The longest period in which the forecasted transactions are expected to occur is within 35 months from December 31, 2008. Of the
net loss on valuation recorded as accumulated other comprehensive income as of December 31, 2008,
￦
58,381 million (US$46,426 thousand) is expected to be
realized and charged to current operations within one year from December 31, 2008.
For the years ended December 31, 2008 and 2007, the Company recognized the net loss of
￦
130,929 million (US$ 104,118 thousand) and
￦
197,265 million
(US$156,871 thousand), respectively, on valuation of the ineffective portion of such instruments and the other derivative instruments in current operations.
The Company recorded total gain on valuation of outstanding derivatives and to be paid of
￦
22,536 million (US$17,921 thousand) and
￦
114,249 million (US$90,854
thousand) in current and non-current derivative assets as of December 31, 2008 and 2007, respectively. Also, total loss on valuation of outstanding derivatives
and present value of premiums to be received of
￦
393,804 million (US$313,164 thousand) and
￦
161,850 million (US$128,708 thousand) is recorded in current and
non-current derivative liabilities as of December 31, 2008 and 2007, respectively.
(2) The transactions of derivatives belonging to subsidiaries as of December 31, 2008 consist of the following:
Gains (losses) Other comprehensive loss
Derivatives
Korean Won
In millions
U.S. Dollars
In thousands
Korean Won
In millions
U.S. Dollars
In thousands

￦
 
￦
 
    
    
    
    
    
    
    
Total
￦
1,921,243 $1,527,827
￦
(319,171) $(253,814)