Vodafone 2003 Annual Report Download - page 46

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS Continued
Bond issues during 2003 financial year
20 November 2002
$150m 4.161% bond with maturity 30 November 2007
26 November 2002
$495m 6.25% bond with maturity 30 November 2032
£450m 5.9% bond with maturity 26 November 2032
29 November 2002
1500m 4.625% bond with maturity 31 January 2008
18 December 2002
$500m 3.95% bond with maturity 30 January 2008
$400m 5.375% bond with maturity 30 January 2015
6 February 2003
11,400m 4.25% bond with maturity 27 May 2009
25 February 2003
1500m 4.25% bond with maturity 27 May 2009
Bond issues since end of the 2003 financial year
10 April 2003
1250m 4.625% bond with maturity 31 January 2008, representing a reopening
of the existing 1500m transaction from 29 November 2002, bringing the new
bond size to 1750m
1500m 5.125% bond with maturity 10 April 2015
$500m 5.375% bond with maturity 30 January 2015, representing a reopening
of the existing $400m transaction from 18 December 2002, bringing the new
bond size to $900m
28 May 2003
1750m 5% bond with maturity 4 June 2018
£150m 6.25% bond with maturity 10 July 2008, representing a reopening of the
existing £250m transaction from 10 July 2001, bringing the new bond size to
£400m
On 9 January 2003, a cash tender offer was announced to purchase three
bonds issued by the Group’s wholly owned subsidiary Vodafone Finance BV
(previously Mannesmann Finance BV) and guaranteed by Vodafone Holding
GmbH, also wholly owned. The offer resulted in a total cash payment of 13,782
million to acquire 50.0%, 54.1% and 71.4% of the 2004, 2005 and 2009
issues, respectively.
On 1 April 2003, the Group announced a cash tender offer to purchase $1,100
million of US dollar bonds and DEM 400 million bonds issued by its wholly
owned subsidiary Vodafone Americas Inc. (previously AirTouch Communications,
Inc.) and guaranteed by the Company. The offers expired on 11 April 2003 and,
on 17 April 2003, the Group announced that, pursuant to these offers, it had
purchased bonds in the principal amounts of $569,987,000 and DEM
308,360,000. With respect to the US dollar bonds, the offer resulted in a total
cash payment of $658 million to acquire 68.9%, 45.6% and 50.0% of the 2005,
2006 and 2008 issues, respectively. With respect to the DEM bond, the offer
resulted in a total cash payment of 1175 million to acquire 77.1% of the issue.
Committed Bank Facilities Amounts drawn
29 November 2001
¥225 billion term credit facility The term credit facility was drawn down
maturing 15 January 2007, in full on 15 October 2002.
entered into by J-Phone The facility is available for general
Finance Co., Ltd. The term credit corporate purposes, although
facility was available for drawing amounts drawn must be
until 28 November 2002. on-lent to the Company.
27 June 2002
$11.025 billion 364-day bank facility As of 31 March 2003, no amounts
(with a one year term-out). had been drawn from the bank facility.
The bank facility was increased The bank facility is available for
from $10.65 billion to $11.025 general corporate purposes, including
billion on 26 July 2002 through the working capital, and serves
accession of a new lender. as a back-up to the Group’s commercial
paper programmes.
Under the terms and conditions of the $11.025 billion bank facility, lenders
would have the right, but not the obligation, to cancel their commitment 30 days
from the date of notification of a change of control of the Company and have
outstanding advances repaid on the last day of the current interest period. The
facility agreement provides for certain structural changes that do not affect the
obligations of the Company to be specifically excluded from the definition of a
change of control. This is in addition to the rights of lenders to cancel their
commitment if the Company has committed an event of default.
Substantially the same terms and conditions apply in the case of J-Phone
Finance Co., Ltd’s ¥225 billion term credit facility, although the change of control
provision is applicable to any guarantor of borrowings under the term credit
facility. As of 31 March 2003, the Company was the sole guarantor.
In addition, Japan Telecom Co., Ltd. and J-Phone Co., Ltd. have fully drawn
bilateral facilities totalling ¥32,203 million (£172 million) and ¥77,655 million
(£414 million), respectively. These bilateral bank facilities expire at various dates
up until January 2009. During December 2002 to February 2003 Vodafone
Holding GmbH in Germany repaid all of its fully drawn bilateral facilities totalling
1562 million (£369 million), which had been due to expire in 2004 and 2006.
Furthermore, certain of the Group’s subsidiary undertakings have committed
facilities that may only be used to fund their operations. Vodafone Egypt has a
partly drawn syndicated bank facility of EGP2.4 billion (£263 million) that expires
on various dates between March 2004 and September 2007 and Vodafone
Hungary has a partly drawn syndicated bank facility of 1350 million
(£237 million) that fully expires in 2008. In aggregate, the Group has committed
bank facilities of approximately £9,262 million, of which £7,065 million was
undrawn at 31 March 2003.
The Group believes that it has sufficient funding for its expected working capital
requirements. Further details regarding the maturity, currency and interest rates
of the Group’s gross borrowings at 31 March 2003 are included in note 20 to
the Consolidated Financial Statements, “Financial liabilities and assets”, included
in this Annual Report.
Option agreements
As part of the agreements entered into upon the formation of Verizon Wireless,
the Company entered into an Investment Agreement with Verizon
Communications, formerly Bell Atlantic Corporation, and Verizon Wireless. Under