Financial Statements
7 Net financing costs
| 2006 £m |
2005 £m |
|
|---|---|---|
| Interest payable on: | ||
| Bank loans and overdrafts | 115 | 84 |
| Other loans | 274 | 261 |
| Loans from joint ventures | 1 | |
| Obligations under finance leases | 2 | 2 |
| 392 | 347 | |
| Development interest capitalised | (12) | (8) |
| 380 | 339 | |
| Interest receivable on: | ||
| Deposits and securities | (11) | (10) |
| Loans to joint ventures | (3) | |
| (11) | (13) | |
| Other finance (income) costs: | ||
| Expected return on pension scheme assets | (3) | (3) |
| Interest on pension scheme liabilities | 3 | 3 |
| Valuation movements on fair value debt | 22 | 7 |
| Valuation movements on fair value derivatives | (22) | (7) |
| Valuation movements on translation of foreign currency debt | 14 | (5) |
| Hedging reserve recycling | (14) | 5 |
| Net financing expenses | 369 | 326 |
| Refinancing charges | ||
| Sainsbury’s Superstore securitisation | 99 | |
| Derivative close-out costs | 23 | |
| Broadgate securitisation | 180 | |
| 122 | 180 | |
| Net financing costs | 491 | 506 |
| Total financing income | (50) | (28) |
| Total financing expenses | 541 | 534 |
| Net financing costs | 491 | 506 |
On 28 February 2006 the Group incurred a pre-tax refinancing charge of £99m whilst redeeming the debt of its securitised Sainsbury's Superstore portfolio, borrowed by BLSSP (Funding) PLC. On the same day BL Superstores Finance PLC issued £753m of new securitised debt (see note 14). In addition, and after significant recent property disposals and the repayment of bank loans, derivatives have been closed out to maintain, in line with Group interest rate policy, an appropriate balance of fixed and floating rate debt resulting in the realisation from equity to the income statement of a £23m charge.
On 2 March 2005 the Group incurred a pre-tax refinancing charge of £180m whilst redeeming the securitised debt of Broadgate (Funding) PLC and 135 Bishopsgate Financing Limited. On the same day Broadgate Financing PLC issued £2,080m of new securitised debt in respect of the Broadgate estate (see note 14).
Interest on development expenditure is capitalised at a rate of 5.6% (2005: 5.6%), with current year tax relief of £4m (2005: £2m).