BT 2011 Annual Report Download - page 129

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126
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Loans and other borrowings
2011 2010
At 31 March £m £m
US Dollar 9.375% bonds December 2010 (2010: 9.125%, minimum 8.125%a)b– 1,951
Euro 7.87% bonds February 2011 (2010: 7.87%, minimum 6.875%a)b– 1,015
US Dollar 5.15% bonds January 2013b537 566
Euro 5.25% bonds January 2013b898 902
Euro 5.25% bonds June 2014b693 696
Euro 6.125% bonds July 2014a,d 557 561
Euro 6.5% bonds July 2015b930 935
Sterling 8.75% bonds December 2016 (2010: 8.5%, minimum 7.5%a) 715 715
Sterling 6.625% bonds June 2017b525 525
US Dollar 5.95% bonds January 2018b695 734
Sterling 8.625% bonds 2020 298 298
Sterling 3.5% index linked bonds April 2025 340 325
Sterling 5.75% bonds December 2028c605 602
US Dollar 9.875% bonds December 2030 (2010: 9.625%, minimum 8.625%a)b1,714 1,811
Sterling 6.375% bonds June 2037b521 521
Total listed bonds 9,028 12,157
Finance leases 294 304
Sterling 6.35% bank loan due August 2012 312 312
Other loans 125 10
Commercial papere71 –
Bank overdrafts (see note 16) 26 8
Total other loans and borrowings 534 330
Total loans and borrowings 9,856 12,791
aThe interest rate payable on these bonds will be subject to adjustment from time to time if either Moody’s or Standard & 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 payable on the bonds and the spread applicable to the floating rate bonds will be increased by 0.25% for each ratings category
adjustment by each ratings 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 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-. At the next coupon date in 2011 the rate payable on these bonds increased by 0.25 percentage points.
bHedged in a designated cash flow hedge.
cHedged in a designated fair value hedge.
dThe interest rate payable on this bond attracts an additional 1.25% for a downgrade by one credit rating category by either or both Moody’s and S&P below Baa3/BBB- respectively.
eCommercial paper is denominated in Euros of £56m (2010: £nil) and US Dollars of £15m (2010: £nil).
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 accrued interest and current fair value adjustments to the
relevant loans or borrowings. 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 2011 and
2010 were unsecured.
2011 2010
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 485 (266) 219 3,269 (737) 2,532
Between one and two years 1,747 (66) 1,681 18 – 18
Between two and three years 10 – 10 1,763 (313) 1,450
Between three and four years 1,209 (48) 1,161 11 – 11
Between four and five years 901 (94) 807 1,213 (177) 1,036
After five years 5,507 (198) 5,309 6,523 (431) 6,092
Total due for repayment after more than one year 9,374 (406) 8,968 9,528 (921) 8,607
Total repayments 9,859 (672) 9,187 12,797 (1,658) 11,139
Fair value adjustments for hedged risk (3) (6)
Total loans and other borrowings 9,856 12,791
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.
OVERVIEWBUSINESS REVIEWFINANCIAL REVIEWREPORT OF THE DIRECTORSFINANCIAL STATEMENTSADDITIONAL INFORMATION