Financial Statements
7 Net financing costs
| 2007 £m |
2006 £m |
|
|---|---|---|
| Interest payable on: | ||
| Bank loans and overdrafts | 75 | 115 |
| Other loans | 284 | 274 |
| Loans from joint ventures | 1 | |
| Obligations under finance leases | 2 | 2 |
| 361 | 392 | |
| Development interest capitalised | (37) | (12) |
| 324 | 380 | |
| Interest receivable on: | ||
| Deposits and securities | (11) | (11) |
| 324 | 380 | |
| Other finance (income) costs: | ||
| Expected return on pension scheme assets | (4) | (3) |
| Interest on pension scheme liabilities | 4 | 3 |
| Valuation movements on fair value debt | (5) | 22 |
| Valuation movements on fair value hedges | 5 | (22) |
| Valuation movements on translation of foreign currency debt | (21) | 14 |
| Hedging reserve recycling | 21 | (14) |
| Net financing expenses | 313 | 369 |
| Refinancing charges | ||
| Debenture refinancings | 266 | |
| Meadowhall Shopping Centre securitisation | 39 | |
| Sainsbury's Superstore securitisation | 99 | |
| Derivative close-out costs | 23 | |
| 305 | 122 | |
| Net financing costs | 618 | 491 |
| Total financing income | (41) | (50) |
| Total financing expenses | 659 | 541 |
| Net financing costs | 618 | 491 |
Interest on development expenditure is capitalised at a rate of 5.5% (2006: 5.6%), with current year tax relief of £8m (2006: £4m).
On 29 August 2006 and 20 December 2006 the Group incurred pre tax refinancing charges of £266m whilst restructuring the existing debentures of the Company and its subsidiary, BL Universal. The Group also refinanced its Meadowhall Shopping Centre on 19 December 2006 by way of a simplified securitisation, incurring a pre tax refinancing charge of £39m. These charges were mainly due to the difference between the market and book values of the existing debt.
In the previous year the Group incurred a pre tax refinancing charge of £99m in respect of its securitised Sainsbury's Superstore portfolio and recycled from equity to the income statement a charge of £23m on closing out derivatives following significant property disposals and consequent debt repayments.