[25] Financial debt

Financial debt comprises interest-bearing obligations of The Linde Group, analysed as follows:

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Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

Non-current

 

Total

 

 

Due within one year

 

Due in one to five years

 

Due in more than five years

 

 

in EUR m

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

Subordinated bonds

 

 

 

 

 

1,050

 

1,049

 

1,050

 

1,049

Other bonds

 

383

 

710

 

4,460

 

3,717

 

2,321

 

3,095

 

7,164

 

7,522

Commercial papers (CP)

 

79

 

75

 

 

 

 

 

79

 

75

Liabilities to banks

 

491

 

490

 

432

 

394

 

18

 

125

 

941

 

1,009

Other financial liabilities

 

70

 

19

 

142

 

158

 

37

 

24

 

249

 

201

Gross financial debt

 

1,023

 

1,294

 

5,034

 

4,269

 

3,426

 

4,293

 

9,483

 

9,856

Less: Securities

 

421

 

521

 

 

 

 

 

421

 

521

Less: Cash and cash equivalents

 

1,417

 

1,137

 

 

 

 

 

1,417

 

1,137

Net financial debt

 

−815

 

−364

 

5,034

 

4,269

 

3,426

 

4,293

 

7,645

 

8,198

Of the subordinated bonds and other bonds at 31 December 2015, EUR 662 m and EUR 2.397 bn respectively (2014: EUR 650 m and EUR 2.603 bn respectively) were in a fair value hedging relationship. If there had been no adjustment to the carrying amount as a result of fair value hedging relationships outstanding at the year-end which had been agreed, the subordinated bonds of EUR 1.050 bn would have been EUR 12 m lower and the other bonds of EUR 7.164 bn would have been EUR 65 m lower. In total, financial debt has increased by a total of EUR 77 m (2014: EUR 111 m) as a result of fair value hedging relationships.

Of the other bonds, EUR 681 m was in a cash flow hedging relationship at 31 December 2015 (2014: EUR 713 m).

The Linde Group concludes Credit Support Annexes (CSAs) with banks to minimise counterparty risk. Under these agreements, the positive and negative fair values of derivatives held by Linde AG and Linde Finance B. V. are collateralised with cash on a regular basis. The amount arising from these agreements which is disclosed in bank loans and overdrafts within financial debt is EUR 65 m (2014: EUR 80 m).

In the 2015 and 2014 financial years, there were no defaults or breaches of loans payable.

The bonds are analysed as follows:

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Fixed-interest bonds

 

 

 

 

 

 

 

 

 

Issuer

 

Nominal volume in relevant currency (ISO code)

 

EUR m1

 

Weighted average residual maturity
(in years)2

 

Weighted average effective interest rate
(in percent)2,3

1

Includes adjustments relating to hedging transactions.

2

Subordinated bonds issued by Linde are included only until the end of the period when Linde may first exercise its right to call in the bond.

3

Effective interest rate in the relevant currency.

Linde Finance B.V., Amsterdam/Linde AG, Munich

 

EUR 5,730 m

 

5,769

 

4.1

 

3.5

Linde Finance B.V., Amsterdam

 

GBP 750 m

 

1,030

 

3.1

 

6.9

Linde Finance B.V., Amsterdam/Linde AG, Munich

 

USD 700 m

 

639

 

4.7

 

2.1

Linde AG, Munich

 

NOK 2,000 m

 

208

 

1.8

 

2.8

Linde Finance B.V., Amsterdam

 

AUD 100 m

 

67

 

3.5

 

4.3

Total

 

 

 

7,713

 

 

 

 

 (XLS:) Download

Variable-interest bonds

 

 

 

 

 

 

 

 

 

Issuer

 

Nominal volume in relevant currency (ISO code)

 

EUR m

 

Weighted average residual maturity (in years)

 

Weighted average coupon (in percent)1

1

Current coupon in the relevant currency.

Linde Finance B.V., Amsterdam

 

USD 490 m

 

451

 

2.7

 

1.0

Linde Finance B.V., Amsterdam

 

EUR 50 m

 

50

 

2.4

 

0.5

Total

 

 

 

501

 

 

 

 

Subordinated bonds

There is a right to call the EUR 700 m and GBP 250 m subordinated bonds issued in July 2006 which have a final maturity date of 14 July 2066. This right applies as from 14 July 2016. If the right to call the loan is not exercised on this date, the coupon will attract interest at a variable rate (3-month Euribor +4.125 percent for the euro bond and 3-month LIBOR +4.125 percent for the bond in British pounds). The right to call the loan will then be available every quarter on the due date for interest payment.

The coupon payment may be suspended on any due date for interest payment. Coupon payments not made will be made up if The Linde Group makes payments for securities pari passu or subordinated securities or Linde AG makes dividend payments.

Other bonds

In October 2015, Linde Finance B. V. made three issues with a total volume of EUR 230 m under the EUR 10 bn Debt Issuance Programme: a five-year fixed-interest EUR 50 m bond with a coupon of 0.634 percent, a twelve-year fixed-interest EUR 80 m bond with a coupon of 1.652 percent, and a 15-year fixed-interest EUR 100 m bond with a coupon of 1.9 percent. All three issues are guaranteed by Linde AG. The proceeds of the issue were used to redeem a EUR 600 m bond which fell due in December 2015.

Euro commercial papers

The Linde Group uses a Euro Commercial Paper Programme for short-term financing. Under the programme, the issuers are Linde AG and Linde Finance B. V. with a guarantee from Linde AG. The volume of the programme is EUR 2 bn. At 31 December 2015, there were no commercial papers outstanding under this programme.

Bank loans and overdrafts

In July 2013, Linde agreed a new EUR 2.5 bn syndicated credit facility which is available for a five-year period, with two options to extend the facility, in each case by one year (subject to the agreement of the lenders). 33 major German and international banks used by Linde are involved in the consortium offering the credit facility. In 2015, Linde successfully extended the facility until 2020.

Financial covenants

No financial covenants are contained in the agreement relating to the EUR 2.5 bn syndicated credit facility.

The bank loans and overdrafts of African Oxygen Limited include various financial covenants relating to key financial figures in African Oxygen Limited. All the financial covenants relating to African Oxygen Limited were fulfilled in the 2015 and 2014 financial years.