27. Financial Liabilities

Financial liabilities were comprised as follows:

Financial Liabilities

 

 

Dec. 31, 2014

 

Dec. 31, 2015

 

 

Total

Of which current

 

Total

Of which current

 

 

€ million

€ million

 

€ million

€ million

Bonds and notes / promissory notes

 

14,964

169

 

15,547

1,235

Liabilities to banks

 

3,835

1,221

 

2,779

1,174

Liabilities under finance leases

 

441

53

 

474

59

Liabilities from derivatives

 

644

296

 

765

598

Other financial liabilities

 

1,976

1,637

 

369

355

Total

 

21,860

3,376

 

19,934

3,421

A breakdown of financial liabilities by contractual maturity is given below:

Maturities of Financial Liabilities 2014

 

 

Dec. 31, 2014

Maturity

 

€ million

2015

 

3,376

2016

 

2,191

2017

 

2,075

2018

 

3,359

2019

 

1,857

2020 or later

 

9,002

Total

 

21,860

Maturities of Financial Liabilities 2015

 

 

Dec. 31, 2015

Maturity

 

€ million

2016

 

3,421

2017

 

2,245

2018

 

2,828

2019

 

2,066

2020

 

45

2021 or later

 

9,329

Total

 

19,934

The Bayer Group’s financial liabilities are mostly unsecured and – with the exception of the three subordinated Hybrid bond A hybrid bond is a corporate bond with equityequivalent properties, usually with either no maturity date or a very long maturity. Due to its subordination, it has a lower likelihood of repayment than a normal bond in the event of issuer bankruptcy. with nominal volumes of €1,500 million, €1,750 million and €1,300 million – are of equal priority.

In addition to promissory notes in the amount of €120 million (2014: €120 million), the Bayer Group has issued the following bonds and notes:

Bonds and Notes

Effective interest rate

 

Stated rate

 

 

 

Nominal volume

 

Dec. 31, 2014

 

Dec. 31, 2015

 

 

 

 

 

 

 

 

€ million

 

€ million

1

Floating-rate coupon comprising three-month EURIBOR plus 22 basis points

2

Floating-rate coupon comprising three-month EURIBOR plus 35 basis points

3

Floating-rate coupon comprising three-month EURIBOR plus 22 basis points

4

Floating-rate coupon comprising three-month USD-LIBOR plus 25 basis points

5

Floating-rate coupon comprising three-month USD-LIBOR plus 28 basis points

6

Date of first option to early redeem the bond at par

 

 

 

 

Bayer AG, Germany

 

 

 

 

 

 

Floating1

 

Floating1

 

EMTN bond 2014 / 2016

 

EUR 500 million

 

500

 

500

1.253%

 

1.125%

 

EMTN bond 2014 / 2018

 

EUR 750 million

 

747

 

748

5.774%

 

5.625%

 

EMTN bond 2006 / 2018

 

GBP 250 million

 

319

 

339

5.541%

 

5.625%

 

EMTN bond 2006 / 2018 (increase)

 

GBP 100 million

 

129

 

137

2.086%

 

1.875%

 

EMTN bond 2014 / 2021

 

EUR 750 million

 

753

 

753

3.811%

 

3.750%

 

Hybrid bond 2014 / 20246 / 2074

 

EUR 1,500 million

 

1,493

 

1,493

2.517%

 

2.375%

 

Hybrid bond 2015 / 20226 / 2075

 

EUR 1,300 million

 

 

1,289

3.093%

 

3.000%

 

Hybrid bond 2014 / 20206 / 2075

 

EUR 1,750 million

 

1,742

 

1,743

5.155%

 

5.000%

 

Hybrid bond 2005 / 20156 / 2105

 

EUR 1,300 million

 

1,317

 

 

 

 

 

Bayer Capital Corporation B.V., Netherlands

 

 

 

 

 

 

1.333%

 

1.250%

 

EMTN bond 2014 / 2023

 

EUR 500 million

 

497

 

497

 

 

 

 

Bayer Corporation, U.S.A.

 

 

 

 

 

 

7.180%

 

7.125%

 

Notes 1995 / 2015

 

US$ 200 million

 

169

 

6.670%

 

6.650%

 

Notes 1998 / 2028

 

US$ 350 million

 

308

 

342

 

 

 

 

Bayer Holding Ltd., Japan

 

 

 

 

 

 

0.858%

 

0.816%

 

EMTN bond 2012 / 2017

 

JPY 30 billion

 

206

 

229

1.493%

 

1.459%

 

EMTN bond 2010 / 2017

 

JPY 10 billion

 

69

 

76

3.654%

 

3.575%

 

EMTN bond 2008 / 2018

 

JPY 15 billion

 

103

 

115

0.629%

 

0.594%

 

EMTN bond 2013 / 2019

 

JPY 10 billion

 

69

 

76

 

 

 

 

Bayer Nordic SE, Finland

 

 

 

 

 

 

Floating2

 

Floating2

 

EMTN bond 2013 / 2016

 

EUR 200 million

 

200

 

200

Floating3

 

Floating3

 

EMTN bond 2014 / 2017

 

EUR 500 million

 

499

 

500

 

 

 

 

Bayer U.S. Finance LLC, U.S.A.

 

 

 

 

 

 

Floating4

 

Floating4

 

Notes 2014 / 2016

 

US$ 500 million

 

411

 

459

Floating5

 

Floating5

 

Notes 2014 / 2017

 

US$ 400 million

 

329

 

367

1.615%

 

1.500%

 

Notes 2014 / 2017

 

US$ 850 million

 

698

 

779

2.564%

 

2.375%

 

Notes 2014 / 2019

 

US$ 2,000 million

 

1,635

 

1,826

3.096%

 

3.000%

 

Notes 2014 / 2021

 

US$ 1,500 million

 

1,230

 

1,372

3.579%

 

3.375%

 

Notes 2014 / 2024

 

US$ 1,750 million

 

1,421

 

1,587

 

 

 

 

Total

 

 

 

14,844

 

15,427

Multi-currency European Medium Term Notes program

An important means of external financing are the bonds issued under the multi-currency European Medium Term Notes (EMTN) program. The following transactions took place in 2015 and 2014:

In January 2014, Bayer AG issued three tranches of EMTN bonds with a total nominal volume of €2 billion. One of these tranches had a nominal volume of €500 million, and the other two had a nominal volume of €750 million each. In March 2014, Bayer Nordic SE issued an EMTN bond with a nominal volume of €500 million. In November 2014, Bayer Capital Corporation B.V. issued an EMTN bond with a nominal volume of €500 million.

Other bonds

In October 2014, Bayer U.S. Finance LLC issued six tranches of bonds in 144a / Reg S format with a total volume of US$7,000 million. The six tranches had nominal volumes of US$500 million, US$400 million, US$850 million, US$2,000 million, US$1,500 million and US$1,750 million.

In October 2015, Bayer Corporation redeemed at maturity the notes with a nominal volume of US$200 million issued in September 1995.

Subordinated bonds

In April 2015, Bayer AG issued a subordinated hybrid bond with a volume of €1,300 million, a final maturity of 60 years and a coupon of 2.375%, to be reset every five years starting in 2022 based on the five-year swap rate. Bayer has the option to redeem the bond for the first time in October 2022. The issue is structured to receive equity credit of 50% from Moody’s and Standard & Poor’s.

In July 2014, Bayer AG issued two subordinated hybrid bonds with a total nominal volume of €3,250 million. The first tranche of €1,750 million has a maturity of 61 years and a coupon of 3.0%. Bayer has an early redemption option at par for the first time in 2020. The second tranche of €1,500 million has a maturity of 60 years and a coupon of 3.75%. On this tranche, Bayer has an early redemption option at par for the first time in 2024. From 2020 and 2024, respectively, the coupons will be reset every five years based on the five-year swap rate. Moody’s and Standard & Poor’s treat 50% of these two bonds as equity. They therefore have a more limited effect on the Group’s rating-relevant debt indicators than conventional borrowings.

In July 2015, Bayer AG utilized its right to early redeem the 100-year subordinated hybrid bond with a nominal volume of €1,300 million issued in July 2005.

Bayer AG guarantees all the bonds issued by subsidiaries.

Lease liabilities

Lease payments totaling €646 million (2014: €603 million), including €172 million (2014: €162 million) in interest, are to be made under finance leases to the respective lessors in future years.

The liabilities under finance leases mature as follows:

Lease Liabilities 2014

 

 

Dec. 31, 2014

 

 

Lease payments

 

Interest component

 

Liabilities under finance leases

Maturity

 

€ million

 

€ million

 

€ million

2015

 

76

 

23

 

53

2016

 

70

 

21

 

49

2017

 

63

 

19

 

44

2018

 

53

 

16

 

37

2019

 

47

 

14

 

33

2020 or later

 

294

 

69

 

225

Total

 

603

 

162

 

441

Lease Liabilities 2015

 

 

Dec. 31, 2015

 

 

Lease payments

 

Interest component

 

Liabilities under finance leases

Maturity

 

€ million

 

€ million

 

€ million

2016

 

86

 

27

 

59

2017

 

76

 

23

 

53

2018

 

68

 

20

 

48

2019

 

60

 

18

 

42

2020

 

60

 

15

 

45

2021 or later

 

296

 

69

 

227

Total

 

646

 

172

 

474

Other financial liabilities

The other financial liabilities as of December 31, 2015, included commercial paper of €308 million (2014: €1,433 million).

Other information

As of December 31, 2015, the Group had credit facilities at its disposal totaling €9.0 billion (2014: €7.3 billion), of which €2.8 billion (2014: €3.8 billion) was used and €6.2 billion (2014: €3.5 billion) was unused and thus available for borrowing on an unsecured basis. Of the unused credit facilities, an amount of €2.7 billion pertains to Covestro.

Further information on the accounting for liabilities from derivatives is given in Note [30].