Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

26 Derivative financial instruments
The fair values of derivative financial instruments at 31st December are as follows:
2008 2007
Positive Negative Positive Negative
fair fair fair fair
value value value value
US$m US$m US$m US$m
Designated as cash flow hedges
– interest rate swaps and caps – 20.2 0.2 2.9
At 31st December – 20.2 0.2 2.9
Non current – 19.2 0.2 2.9
Current (refer note 15) – 1.0 – –
At 31st December – 20.2 0.2 2.9
The remaining contractual maturities of derivative financial instruments, based on their undiscounted cash outflows,
are analyzed as follows:
Within Between Between Beyond
one one and two and five
year two years five years years
US$m US$m US$m US$m
2008
Net settled
– interest rate swaps 5.8 5.3 8.7 1.7
2007
Net settled
– interest rate swaps 0.4 1.1 1.5 0.7
The notional principal amounts of the outstanding interest rate swap and cap contracts at 31st December 2008 were
US$321.2 million (2007: US$312.9 million).
At 31st December 2008, the fixed interest rates relating to interest rate swaps and caps vary from 1.5% to 7.0%
(2007: 1.5% to 7.0%).
The fair values of interest rate swaps are based on the estimated cash flows discounted at market rates ranging from
1.0% to 3.4% (2007: 3.7% to 6.4%) per annum.
27 Financial guarantee
2008 2007
US$m US$m
Guarantee in respect of facilities made available to an associate 21.1 12.5
Guarantee in respect of facilities made available to an associate are stated at their respective contracted amounts. The
Directors are of the opinion that it is not probable that such guarantees will be called upon.
Annual Report 2008 71