Financial Statements
Notes to the Accounts
7 Net financing costs
| 2008 £m |
2007 £m |
|
|---|---|---|
| Interest payable on: | ||
| Bank loans and overdrafts | 71 | 75 |
| Other loans | 280 | 284 |
| Loans from joint ventures | 1 | |
| Obligations under finance leases | 2 | 2 |
| 354 | 361 | |
| Development interest capitalised | (43) | (37) |
| 311 | 324 | |
| Interest receivable on: | ||
| Deposits and securities | (20) | (11) |
| Other finance (income) costs: | ||
| Expected return on pension scheme assets | (5) | (4) |
| Interest on pension scheme liabilities | 4 | 4 |
| Valuation movements on fair value debt | (5) | |
| Valuation movements on fair value hedges | 5 | |
| Valuation movements on translation of foreign currency debt | (1) | (21) |
| Hedging reserve recycling | 1 | 21 |
| Net financing expenses | 290 | 313 |
| Refinancing charges | ||
| Debenture refinancings | 266 | |
| Meadowhall shopping centre securitisation | 39 | |
| 305 | ||
| Net financing costs | 290 | 618 |
| Total financing income | (26) | (41) |
| Total financing expenses | 316 | 659 |
| Net financing costs | 290 | 618 |
Interest on development expenditure is capitalised at a rate of 6.0% (2007: 5.5%), with current year tax relief of £nil (2007: £8m).
In the prior year 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 securitisation 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.
