Vodafone 2007 Annual Report Download - page 58

56 Vodafone Group Plc Annual Report 2007
Financial Position and Resources
continued
In the year to 31 March 2007, bonds with a nominal value of £4.2 billion
were issued under the US shelf and the Euro Medium Term Note
programme. The bonds issued during the year were:
US shelf/Euro
Medium Term
Amount Note (“EMTN”)
Date of bond issue Maturity of bond Currency Million programme
14 June 2006 14 June 2016 EUR 300 EMTN
14 June 2006 13 January 2012 EUR 1,000 EMTN
10 August 2006 10 January 2013 AUD 265 EMTN
29 August 2006 13 January 2012 EUR 300 EMTN
5 September 2006 5 September 2013 EUR 850 EMTN
27 November 2006 14 June 2016 EUR 200 EMTN
30 January 2007 30 January 2009 EUR 300 EMTN
5 February 2007 5 February 2009 EUR 150 EMTN
15 February 2007 15 February 2010 EUR 300 EMTN
27 February 2007 27 February 2012 USD 500 US shelf
27 February 2007 27 February 2012 USD 500 US shelf
27 February 2007 27 February 2017 USD 1,300 US shelf
27 February 2007 27 February 2037 USD 1,200 US shelf
At 31 March 2007, the Group had bonds outstanding with a nominal value
of £17,101 million.
Committed facilities
The following table summarises the committed bank facilities available to
the Group at 31 March 2007:
Committed Bank Facilities Amounts drawn
24 June 2004
$5.9 billion Revolving Credit No drawings have been made against
Facility, maturing 24 June 2009. this facility. The facility supports the
Group’s commercial paper
programmes and may be used for
general corporate purposes including
acquisitions.
24 June 2005
$5.0 billion Revolving Credit No drawings have been made against
Facility, maturing 22 June 2012. this facility. The facility supports the
Group’s commercial paper programmes
and may be used for general corporate
purposes including acquisitions.
21 December 2005
¥258.5 billion Term Credit Facility, The facility was drawn down in full on
maturing 16 March 2011, entered 21 December 2005. The facility is
into by Vodafone Finance K.K. available for general corporate
and guaranteed by the Company. purposes, although amounts drawn
must be on-lent to the Company.
16 November 2006
€0.4 billion Loan Facility, The facility was drawn down in full on
maturing 14 February 2014 14 February 2007. The facility is available
for financing capital expenditure in the
Group’s Turkish operating company.
Under the terms and conditions of the $10.9 billion committed bank
facilities, lenders have the right, but not the obligation, to cancel their
commitments and have outstanding advances repaid no sooner than
30 days after notification of a change of control of the Company. The facility
agreements provide 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 Vodafone
Finance K.K.’s ¥258.5 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 2007, the Company was the sole
guarantor.
The terms and conditions of the €0.4 billion loan facility are similar to those
of the $10.9 billion committed bank facilities, with the addition that, should
the Group’s Turkish operating company spend less than the equivalent of
$0.8 billion on capital expenditure, the Group will be required to repay the
drawn amount of the facility that exceeds 50% of the capital expenditure.
Furthermore, two of the Group’s subsidiary undertakings are funded by
external facilities which are non-recourse to any member of the Group other
than the borrower, due to the level of country risk involved. These facilities
may only be used to fund their operations. Vodafone Egypt has a partly
drawn (EGP 1 billion (£89 million)) syndicated bank facility of EGP 3 billion
(£268 million) that matures in March 2014. Vodafone Romania has a fully
drawn €156 million (£106 million) syndicated bank facility that matures at
various dates up to October 2010.
In aggregate, the Group has committed facilities of approximately
£7,982 million, of which £5,842 million was undrawn and £2,140 million
was drawn at 31 March 2007. On 8 May 2007, the Group’s $5.9 billion
Revolving Credit Facility was extended to $6.1 billion and the $5.0 billion
Revolving Credit Facility was extended to $5.2 billion.
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 2007 are
included in note 24 of the Consolidated Financial Statements.
Financial assets and liabilities
Analyses of financial assets and liabilities, including the maturity profile of
debt, currency and interest rate structure, are included in notes 18 and 24
to the Consolidated Financial Statements. Details of the Group’s treasury
management and policies are included within note 24 to the Consolidated
Financial Statements.
Option agreements and similar arrangements
Potential cash inflows
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 this agreement, dated 3 April 2000, the Company has the right to
require Verizon Communications or Verizon Wireless to acquire interests in
the Verizon Wireless partnership from the Company with an aggregate
market value of up to $20 billion during certain periods up to August 2007,
dependent on the value of the Company’s 45% stake in Verizon Wireless.
This represents a potential source of liquidity to the Group.
Exercise of the option could have occurred in either one or both of two
phases. The Phase I option expired in August 2004 without being exercised.
The Phase II option may be exercised during the period commencing
30 days before and ending 30 days after 10 July 2007. Similar arrangements
for 10 July 2006 expired unexercised. The Phase II option also limits the
aggregate amount paid to $20 billion and caps the payments under single
exercises to $10 billion. Determination of the market value of the
Company’s interests will be by mutual agreement of the parties to the
transaction or, if no such agreement is reached within 30 days of the