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DELHAIZE GROUP FINANCIAL STATEMENTS 2014 // 119
18. Financial Liabilities
18.1 Long-term Debt
Delhaize Group manages its debt and overall financing strategies using a combination of short, medium and long-term debt and
interest rate and currency swaps. The Group finances its daily working capital requirements, when necessary, through the use of
its various committed and uncommitted lines of credit. The short and medium-term borrowing arrangements generally bear
interest at the inter-bank offering rate at the borrowing date plus a pre-set margin. Delhaize Group also has a treasury notes
program available.
The carrying values (in Euro) of long-term debt (excluding finance leases, see Note 18.3), net of discounts and premiums,
deferred transaction costs and including fair value hedge accounting adjustments were as follows:
Nominal
December 31,
(in millions)
Nominal Interest
Rate
Maturity
amount
in local
currency
(5)
Currency
2014
2013
2012
Senior notes, unsecured
5.70%
2040
827
(6)
USD
481
421
438
Debentures, unsecured
9.00%
2031
271
USD
222
195
204
Notes, unsecured
8.05%
2027
71
USD
57
50
52
Senior fixed rate bonds
(1)
3.125%
2020
400
EUR
402
396
397
Senior notes
(1)
4.125%
2019
300
USD
245
212
232
Retail bond, unsecured
(4)
4.25%
2018
400
EUR
400
400
400
Bonds, unsecured
6.50%
2017
450
USD
370
325
339
Senior notes
7.06%
2016
9
USD
7
6
6
Mortgages payable
8.25%
2016
1
USD
—
1
1
Notes, unsecured
(1)
5.625%
2014
—
EUR
—
219
229
Senior notes, unsecured
(1)
5.875%
2014
(3)
—
USD
—
—
75
Other debt
4.58% to 7%
2014 to 2031
21
USD
18
14
15
Bonds, unsecured
(2)
5.10%
2013
—
EUR
—
—
80
Bank borrowings
—
EUR
—
—
1
Total non-subordinated borrowings
2 202
2 239
2 469
Less current portion
(1)
(228)
(156)
Total non-subordinated borrowings,
non-current
2 201
2 011
2 313
_______________
(1) Notes are part of hedging relationship (see Note 19) and refinancing transactions that took place in 2012 (see below).
(2) Bonds issued by Delhaize Group’s Greek subsidiary Alfa Beta.
(3) Redeemed in 2013 (see below).
(4) Debt is part of partial hedging relationships (see Note 19).
(5) Nominal amounts outstanding at December 31, 2014.
(6) Includes the non-cash premium granted as part of a debt exchange in 2010, being amortized over the remaining term of the notes.
The interest rate on long-term debt (excluding finance leases, see Note 18.3) was on average 5.1%, 4.2% and 4.4 % at
December 31, 2014, 2013 and 2012, respectively. These interest rates were calculated considering the interest rate swaps
discussed in Note 19.
Delhaize Group has a multi-currency treasury note program in Belgium. Under this program, Delhaize Group may issue both
short-term notes (commercial paper) and medium-term notes in amounts up to €500 million, or the equivalent thereof in other
eligible currencies. No notes were outstanding at December 31, 2014, 2013 and 2012.
Refinancing of Long-term Debts
In 2012, Delhaize Group issued $300 million aggregate principal amount of senior notes with an annual interest rate of 4.125%
due 2019. The senior notes were issued at a discount of 0.193% on their principal amount. The offering of the notes was made to
qualified investors pursuant to an effective registration statement filed by Delhaize Group with the U.S. Securities and Exchange
Commission (SEC), and are not listed on any stock exchange. At the same time, the Group completed a tender offer for cash
prior to maturity of up to €300 million aggregate principal amount of its outstanding €500 million 5.625% senior notes due 2014.
The net proceeds of the debt issuance were used in part to fund the partial repurchase of these senior notes for a nominal
amount of €191 million, at a price of 108.079%.
Simultaneously, Delhaize Group entered into (i) matching interest rate swaps to hedge the Group’s exposure to changes in the
fair value of the 4.125% notes due 2019, and (ii) cross-currency swaps, exchanging the principal amount ($300 million for €225
million) and interest payments (both variable), to cover the foreign currency exposure (economic hedge). See Note 19 for
additional information on the hedge accounting applied.
Delhaize Group Annual Report 2014 • 121