 |
Notes to the Financial Statements
19 Net debt
| |
|
|
Group |
|
|
Parent |
|
| |
|
|
|
| |
|
2003
£m
|
|
2002
£m
|
2003
£m
|
|
2002
£m
|
|
| |
|
|
|
|
|
|
|
|
| Secured on the assets of the Group |
|
|
|
|
|
|
|
| 6.5055% Secured Notes 2038 |
|
97.7
|
|
97.7
|
|
|
|
| 5.920% Secured Notes 2035 |
|
59.2
|
|
59.2
|
|
|
|
| 8 7/8% First Mortgage
Debenture Bonds 2035 |
|
246.6
|
|
246.6
|
246.6
|
|
246.6
|
| 9 3/8% First Mortgage
Debenture Stock 2028 |
|
197.2
|
|
197.2
|
197.2
|
|
197.2
|
| 7.743% Secured Notes 2025 |
|
19.7
|
|
19.6
|
|
|
|
| 10 1/2% First Mortgage
Debenture Stock 2019/24 |
|
12.6
|
|
12.6
|
12.6
|
|
12.6
|
| 11 3/8% First Mortgage
Debenture Stock 2019/24 |
|
20.4
|
|
20.4
|
20.4
|
|
20.4
|
| 5.66% 135 Bishopsgate Securitisation 2018 |
|
1.9
|
|
1.9
|
|
|
|
| 8.49% 135 Bishopsgate Securitisation 2018 |
|
7.1
|
|
7.1
|
|
|
|
|
| |
|
662.4
|
|
662.3
|
476.8
|
|
476.8
|
|
| Unsecured |
|
|
|
|
|
|
|
| Class A1 5.260% Unsecured Notes 2035 |
|
543.0
|
|
542.8
|
|
|
|
| Class B 5.793% Unsecured Notes 2035 |
|
88.9
|
|
88.9
|
|
|
|
| Class C Fixed Rate Unsecured Notes 2035 |
|
74.0
|
|
74.0
|
|
|
|
| Class C2 6.4515% Unsecured Notes 2032 |
|
73.4
|
|
73.3
|
|
|
|
| Class B 6.0875% Unsecured Notes 2031 |
|
220.0
|
|
219.8
|
|
|
|
| Class A3 5.7125% Unsecured Notes 2031 |
|
146.6
|
|
146.5
|
|
|
|
| Class A2 5.67% Unsecured Notes 2029 |
|
287.8
|
|
291.9
|
|
|
|
| Class A2(C) 6.457% Unsecured Notes 2025 |
|
157.0
|
|
157.0
|
|
|
|
| Class B2 6.998% Unsecured Notes 2025 |
|
205.6
|
|
205.5
|
|
|
|
| Class B3 7.243% Unsecured Notes 2025 |
|
20.5
|
|
20.6
|
|
|
|
| Class A1 Fixed Rate Unsecured Notes 2024 |
|
318.6
|
|
317.5
|
|
|
|
| 5.66% 135 Bishopsgate Securitisation 2018 |
|
23.3
|
|
24.3
|
|
|
|
| 8.49% 135 Bishopsgate Securitisation 2018 |
|
91.6
|
|
94.5
|
|
|
|
| Class A1 6.389% Unsecured Notes 2016 |
|
60.9
|
|
63.3
|
|
|
|
| Class B1 7.017% Unsecured Notes 2016 |
|
91.6
|
|
97.0
|
|
|
|
| Class C1 6.7446% Unsecured Notes 2014 |
|
161.6
|
|
171.0
|
|
|
|
| Class D Fixed/Floating Rate Unsecured Notes 2014 |
|
78.7
|
|
98.2
|
|
|
|
| Class A2 5.555% Unsecured Notes 2013 |
|
49.5
|
|
49.3
|
|
|
|
| 10 1/4% Bonds
2012 |
|
1.7
|
|
1.7
|
1.7
|
|
1.7
|
| * 7.35% Senior US Dollar Notes 2007 |
|
97.8
|
|
97.8
|
97.8
|
|
97.8
|
| Guaranteed Floating Rate Unsecured Loan Notes
2005 |
|
0.8
|
|
|
|
|
|
| Bank loans and overdrafts |
|
899.0
|
|
240.4
|
899.0
|
|
240.4
|
|
| |
|
3,691.9
|
|
3,075.3
|
998.5
|
|
339.9
|
|
| Convertible Bonds |
|
|
|
|
|
|
|
| 6% Subordinated Irredeemable Convertible
Bonds |
|
146.8
|
|
146.7
|
146.8
|
|
146.7
|
| ** 6 1/2% Convertible Bonds 2007 |
|
|
|
323.0
|
|
|
323.0
|
|
| |
|
146.8
|
|
469.7
|
146.8
|
|
469.7
|
|
| Gross debt |
|
4,501.1
|
|
4,207.3
|
1,622.1
|
|
1,286.4
|
| Cash and deposits |
|
(139.7)
|
|
(366.9)
|
(28.7)
|
|
(237.6)
|
|
| Net debt |
|
4,361.4
|
|
3,840.4
|
1,593.4
|
|
1,048.8
|
|
†These borrowings are obligations of ringfenced,
default remote, special purpose companies, with no recourse to other companies
or assets in the Group.
*These borrowings have been hedged into Sterling since the date of issue.
**These bonds were redeemed and cancelled on 24 June 2002.
 Back
to top
| Interest rate profile including effect of derivatives |
Group |
| |
2003
£m
|
|
2002
£m
|
|
| Fixed rate |
3,543.8
|
|
3,541.2
|
| Capped rate |
100.0
|
|
100.0
|
| Variable rate (net of cash) |
717.6
|
|
199.2
|
|
| Net debt |
4,361.4
|
|
3,840.4
|
|
All the above debt is effectively Sterling except for £120.7m (2002:
£101.0m) of Euro debt of which £57.4m (2002: £72.7m) is
fixed and the balance floating. At 31 March 2003 the weighted average interest
rate of the Sterling fixed rate debt is 6.78% (2002: 6.84%). The weighted
average period for which the rate is fixed is 19.3 years (2002: 21.6 years).
The Irredeemable Convertible Bond is treated as having a life of 100 years
for this calculation. The weighted average interest rate for the Euro fixed
rate debt is 4.00% (2002: 3.85%) and the weighted average period for which
the rate is fixed is 1.9 years (2002: 2.3 years). The floating rate debt
is set for periods of the Company ’s choosing at the relevant LIBOR
(or similar) rate.
Total borrowings where any instalments are due after five years is £2,866.3m
(2002: £2,915.0m).
Details of the financing, treasury policy and financial risk management
are set out here.
Maturity analysis of net debt
| |
|
|
Group
|
|
|
Parent
|
|
| |
|
|
| |
|
2003
£m
|
|
2002
£m
|
2003
£m
|
|
2002
£m
|
|
| Repayable: |
within one year and on demand |
234.7
|
|
446.9
|
176.9
|
|
401.5
|
| between: |
one and two years |
459.6
|
|
151.1
|
399.1
|
|
93.0
|
| |
two and five years |
543.6
|
|
324.9
|
379.5
|
|
154.4
|
| |
five and ten years |
431.1
|
|
365.0
|
43.1
|
|
14.0
|
| |
ten and fifteen years |
430.8
|
|
418.3
|
|
|
|
| |
fifteen and twenty years |
469.9
|
|
459.9
|
|
|
|
| |
twenty and twenty five years |
789.0
|
|
630.7
|
230.1
|
|
32.9
|
| |
twenty five and thirty years |
666.8
|
|
845.8
|
|
|
197.2
|
| |
thirty and thirty five years |
328.8
|
|
418.0
|
246.6
|
|
246.7
|
| Irredeemable |
|
146.8
|
|
146.7
|
146.8
|
|
146.7
|
| |
|
|
|
| Gross debt |
|
4,501.1
|
|
4,207.3
|
1,622.1
|
|
1,286.4
|
| |
|
|
|
| Cash |
|
(50.3)
|
|
(20.4)
|
(20.3)
|
|
(3.6)
|
| Term deposits |
|
(89.4)
|
|
(346.5)
|
(8.4)
|
|
(234.0)
|
| |
|
|
|
| Total cash and deposits |
|
(139.7)
|
|
(366.9)
|
(28.7)
|
|
(237.6)
|
|
| Net debt |
|
4,361.4
|
|
3,840.4
|
1,593.4
|
|
1,048.8
|
|
Back
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Maturity of committed undrawn borrowing facilities
| |
|
Group
|
| |
|
|
| |
|
2003
|
|
2002
|
| |
|
£m
|
|
£m
|
|
| Expiring: |
within one year |
133.1
|
|
437.1
|
| between: |
one and two years |
30.0
|
|
161.8
|
| |
two and three years |
255.0
|
|
402.5
|
| |
three and four years |
170.0
|
|
425.0
|
| |
four and five years |
|
|
215.0
|
| |
over five years |
8.6
|
|
37.7
|
|
| Total |
|
596.7
|
|
1,679.1
|
|
Comparison of market values and book values
| |
2003
|
2002
|
| |
|
|
| |
Market
|
Book
|
|
Market
|
Book
|
|
| |
value
|
value
|
Difference
|
value
|
value
|
Difference
|
| |
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
| Fixed rate debt: |
|
|
|
|
|
|
| Securitisations |
3,153.6
|
2,878.2
|
275.4
|
3,009.2
|
2,920.9
|
88.3
|
|
Debentures
and unsecured bonds
|
756.9
|
576.3
|
180.6
|
729.1
|
576.3
|
152.8
|
|
Convertible
Bonds
|
154.0
|
146.8
|
7.2
|
492.8
|
469.7
|
23.1
|
| Bank debt |
899.8
|
899.8
|
|
240.4
|
240.4
|
|
| Cash and deposits |
(139.7)
|
(139.7)
|
|
(366.9)
|
(366.9)
|
|
|
| |
4,824.6
|
4,361.4
|
463.2
|
4,104.6
|
3,840.4
|
264.2
|
|
| Derivatives: |
|
|
|
|
|
|
|
unrecognised
gains
|
(17.5)
|
|
(17.5)
|
(4.4)
|
|
(4.4)
|
|
unrecognised
losses
|
41.0
|
|
41.0
|
44.1
|
|
44.1
|
| |
|
| |
23.5
|
|
23.5
|
39.7
|
|
39.7
|
|
| Total |
4,848.1
|
4,361.4
|
486.7
|
4,144.3
|
3,840.4
|
303.9
|
|
The market value and difference are shown before
any tax relief. The difference between book value and market value on the
convertibles arises principally from the British Land share price.
In accordance with Accounting Standards the book value of debt is par value
net of unamortised issue costs. Short term debtors and creditors have been
excluded from the disclosures (other than the currency disclosures). The
valuations of the Broadgate and Meadowhall Notes have been undertaken by
Morgan Stanley. The valuations of 135 Bishopsgate Securitisations 2018 have
been undertaken by The Royal Bank of Scotland. The valuations of other fixed
rate debt and convertible debt have been undertaken by UBS Warburg. The
bank debt has been valued assuming it could be renegotiated at contracted
margins. The derivatives have been valued by the independent treasury advisor
Record Currency Management.
The Group uses interest rate swaps to manage its interest rate profile.
Changes in the fair value of instruments used as hedges are not recognised
in the financial statements until the hedged position matures.
Net losses of £6.5m (2002 gains: £4.8m) were recognised in
the current year, comprising gains of £7.0m (2002: £17.7m)
and losses of £13.5m (2002: £12.9m).
Of the unrecognised amount at 31 March 2003, £nil gains and £nil
losses are expected to be realised in the next financial year (2002: £nil
gains; £1.2m losses) and the balance in subsequent years.
Back
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6% Subordinated Irredeemable Convertible Bonds
The £150m 6% Subordinated Irredeemable Convertible Bonds carry a Bondholder
conversion right exercisable at any time into Ordinary Shares of the Company
at 500p (2002: 500p) per share. The Company has the right to redeem, at
its discretion, the Bonds at par if after 9 April 2001 the average ordinary
share price attains 130% of the conversion price for a 30 day period and
after 9 April 2008 without conditions. The Company has the right to redeem
the remaining Bonds where 75% of the Bonds have been converted or purchased
or cancelled. If the Company elects to redeem the Bonds, Bondholders have
the right to convert into the underlying Ordinary Shares. The Company has
an option to exchange the Bonds for 6% Convertible Preference Shares with
the same conversion terms. The Company has a further option to exchange
the preference shares back to Convertible Bonds after these preference shares
have been in issue for six months. On conversion of the entire issue into
Ordinary Shares of the Company 30.0 million Ordinary Shares would be issued.
Debt issue costs
Total unamortised issue costs reducing the principal amount of debt in arriving
at the Balance Sheet values amount to £57.5m (2002: £63.7m)
, of which £3.4m (2002: £3.5m) relates to the secured tranches
of Securitisations, £44.7m (2002: £50.7m) to the unsecured tranches
of Securitisations, £6.2m (2002: £6.2m) to Debentures and £3.2m
(2002: £3.3m) to Convertible Bonds.
Back
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|
