BOC Report and accounts 2005 - Alle jaarverslagen

120 The BOC Group plc Annual report and accounts 2005 Notes to the financial statements
20. Net borrowings and finance leases continued
c) Short-term interest rates
The average interest rate on commercial paper for the year to 30 September 2005 was 4.4 per cent (2004: 3.3 per cent) and on other short-term
borrowings was 8.2 per cent (2004: 9.3 per cent).
d) Facilities
The Group maintains a number of short and medium-term committed lines of credit.The main medium-term facilities are multi-currency agreements
with a group of relationship banks, under which the Group may borrow up to US$450 million (£254 million) (2004: US$450 million (£249 million)) for
general corporate purposes.These facilities were undrawn both at 30 September 2005 and 30 September 2004.The following table shows the maturity
profile of these facilities.
2005 2004
$ million $ million
Four to five years – –
Three to four years – 450.0
Two to three years 450.0 –
One to two years – –
Within one year – –
450.0 450.0
In October 2005, these facilities were replaced with US$600 million (£339 million) of committed multi-currency facilities maturing in 2010.
Additional committed facilities are maintained by the principal operating units in the Group.
e) Security
The secured loans, maturing between 30 September 2005 and 2019, are principally secured by charges over the property, plant and machinery, stocks and
trade debtors of certain overseas subsidiaries.
21. Financial instruments
a) Interest rate, currency and counterparty exposure
The Group’s approach to managing currency and interest rate risk and its use of swaps in that process is described on page 56 in the financial review
under the heading ‘management of financial risks’.
Interest rate swaps
At 30 September 2005, the Group had entered into five interest rate swap agreements (2004: five) with its main relationship banks with notional principal
amounts of £286.4 million (2004: £285.3 million).The swaps’ underlying currencies are sterling, US dollars and Japanese yen.The following table shows the
maturity profile and weighted average interest rates payable and receivable on interest rate swaps at 30 September:
2005 2004
Maturity profile £ million £ million
Beyond five years – –
Four to five years – 200.0
Three to four years 200.0 85.3
Two to three years 86.4 –
One to two years – –
Within one year – –
286.4 285.3
% %
Weighted average receivable swap rate 4.1 3.8
Weighted average payable swap rate 4.8 4.5
The weighted average receivable/payable swap interest rate is calculated by applying the notional swap interest received or paid, using rates applicable at
the financial year end, to the notional principal of outstanding swaps at the financial year end.
During 2004, the Group also entered into four interest rate swap agreements that are due to commence in 2006 and 2007 for a period of five years.
The notional principal amounts of these swaps are £106.4 million and their underlying currencies are US dollars and Japanese yen.