BT 2010 Annual Report Download - page 121

FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
119BT GROUP PLC ANNUAL REPORT & FORM 20-F
FINANCIAL STATEMENTSADDITIONAL INFORMATION REPORT OF THE DIRECTORS REVIEW OF THE YEAR OVERVIEW
18. Loans and other borrowings
2010 2009
At 31 March £m £m
Sterling 6.375% bonds June 2037b521 521
US Dollar 9.625% (2009: 9.125%) notes December 2030 (minimum 8.625%a)b1,811 1,914
Sterling 5.75% bonds December 2028c602 608
Sterling 3.5% indexed linked notes April 2025 325 330
Sterling 8.625% bonds March 2020 298 298
US Dollar 5.95% bonds January 2018b734 777
Sterling 6.625% bonds June 2017b525 524
Sterling 8.5% (2009: 8.0%) notes December 2016 (minimum 7.5%a) 715 713
Euro 6.5% bonds July 2015b935 973
Euro 6.125% bonds July 2014b,f 561 –
Euro 5.25% bonds June 2014b696 723
Euro 5.25% bonds January 2013b902 935
US Dollar 5.15% bonds January 2013b566 599
Euro 7.87% (2009: 7.375%) notes February 2011 (minimum 6.875%a)b1,015 1,051
US Dollar 9.125% (2009: 8.625%) notes December 2010 (minimum 8.125%a)b1,951 2,074
US Dollar 8.765% bonds August 2009d– 149
Total listed bonds, debentures and notes 12,157 12,189
Finance leases 304 332
Commercial paperb,e – 715
Sterling 6.35% bank loan due August 2012 312 312
Sterling 10.4% bank loan due September 2009 – 140
Sterling floating rate note 2009-2010 –28
Other loans 2009-2012 10 6
Bank overdrafts (of which £nil (2009: £160m) had a legally enforceable right
of set off – see note 10) 8 185
Total other loans and borrowings 330 1,386
Total loans and other borrowings 12,791 13,907
aThe interest rate payable on these notes will be subject to adjustment from time to time if either Moody’s or Standard and Poor’s (S&P) reduce the rating ascribed to the group’s senior unsecured debt below
A3 in the case of Moody’s or below A– in the case of S&P. In this event, the interest rate payable on the notes and the spread applicable to the floating notes will be increased by 0.25% for each ratings
category adjustment by each rating agency. In addition, if Moody’s or S&P subsequently increase the ratings ascribed to the group’s senior unsecured debt, then the interest rate then payable on notes and
the spread applicable to the floating notes will be decreased by 0.25% for each rating category upgrade by each rating agency, but in no event will the interest rate be reduced below the minimum interest
rate reflected in the above table. In February 2010, S&P downgraded BT’s credit rating by one ratings category to BBB– as detailed on page 138. At the next coupon date in the 2011 financial year, the rate
payable on these bonds will therefore increase by 0.25 percentage points.
bHedged in a designated cash flow hedge.
cHedged in a designated fair value hedge.
dHedged in a designated cash flow and fair value hedge.
eCommercial paper is denominated in Sterling of £nil (2009: £209m) and Euros of £nil (2009: £506m).
fThe group’s €600m bond issued in June 2009 would attract an additional 1.25 percentage points for a downgrade by one credit rating category by both Moody’s and S&P below Baa3/BBB– respectively.
The interest rates payable on loans and borrowings disclosed above reflect the coupons on underlying issued loans and borrowings and not
the interest rates achieved through applying associated currency and interest rate swaps in hedge arrangements.
The carrying values disclosed above reflect balances at amortised cost adjusted for deferred and current fair value adjustments to the
relevant loans or borrowings’ hedged risk in a fair value hedge. This does not reflect the final principal repayment that will arise after
taking account of the relevant derivatives in hedging relationships which is reflected in the table below. Apart from finance leases, all
borrowings as at 31 March 2010 and 2009 were unsecured.
2010 2009
Effect of Principal Effect of Principal
Carrying hedging repayments at Carrying hedging and repayments at
amount and interestahedged rates amount interestahedged rates
At 31 March £m £m £m £m £m £m
Repayments fall due as follows:
Within one year, or on demand 3,269 (737) 2,532 1,542 (352) 1,190
Between one and two years 18 – 18 3,098 (551) 2,547
Between two and three years 1,763 (313) 1,450 10 – 10
Between three and four years 11 – 11 1,829 (380) 1,449
Between four and five years 1,213 (177) 1,036 14 – 14
After five years 6,523 (431) 6,092 7,412 (799) 6,613
Total due for repayment after more than one year 9,528 (921) 8,607 12,363 (1,730) 10,633
Total repayments 12,797 (1,658) 11,139 13,905 (2,082) 11,823
Fair value adjustments for hedged risk (6) 2
Total loans and other borrowings 12,791 13,907
aAdjustments for hedging and interest reflect the impact of the currency element of derivatives and adjust the repayments to exclude interest recognised in the carrying amount.