Financial Liabilities

Financial liabilities were comprised as follows:

Financial Liabilities

 

 

Dec. 31, 2016

 

Dec. 31, 2017

 

 

Total

 

Of which current

 

Total

 

Of which current

 

 

€ million

 

€ million

 

€ million

 

€ million

Bonds and notes / promissory notes

 

15,991

 

2,010

 

12,436

 

505

Liabilities to banks

 

1,837

 

820

 

534

 

513

Liabilities under finance leases

 

436

 

59

 

238

 

32

Liabilities from derivatives

 

587

 

309

 

240

 

221

Other financial liabilities

 

730

 

203

 

970

 

664

Total

 

19,581

 

3,401

 

14,418

 

1,935

The development of financial liabilities in 2017 is outlined in Note “Net Cash Provided by (Used in) Financing Activities”.

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

Maturities of Financial Liabilities

 

 

Dec. 31, 2016

 

 

€ million

2017

 

3,401

2018

 

3,241

2019

 

2,456

2020

 

44

2021

 

2,714

2022 or later

 

7,725

Total

 

19,581

Maturities of Financial Liabilities

 

 

Dec. 31, 2017

 

 

€ million

2018

 

1,935

2019

 

2,155

2020

 

1,248

2021

 

2,096

2022

 

89

2023 or later

 

6,895

Total

 

14,418

In addition to promissory notes in the amount of €45 million (2016: €45 million), the Bayer Group has issued the following bonds and notes:

Bonds and Notes

Effective interest rate

 

Stated rate

 

 

 

Nominal volume

 

Dec. 31, 2016

 

Dec. 31, 2017

 

 

 

 

 

 

 

 

€ million

 

€ million

1

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

2

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

3

Bond was early redeemed in October 2017

4

Bond can be redeemed in cash, Covestro shares or a combinaton thereof

5

Date of first option to early redeem the bond at par

6

The mandatory convertible notes were allocated to capital reserves and to other financial liabilities.

 

 

 

 

Bayer AG, Germany

 

 

 

 

 

 

1.253%

 

1.125%

 

DIP bond 2014 / 20183

 

EUR 750 million

 

749

 

5.774%

 

5.625%

 

DIP bond 2006 / 2018

 

GBP 250 million

 

292

 

281

5.541%

 

5.625%

 

DIP bond 2006 / 2018 (increase)

 

GBP 100 million

 

117

 

113

0.050%

 

0.050%

 

Exchangeable bond4 2017 / 2020

 

EUR 1,000 million

 

 

1,220

2.086%

 

1.875%

 

DIP bond 2014 / 2021

 

EUR 750 million

 

755

 

753

3.811%

 

3.750%

 

Hybrid bond 2014 / 20245 / 2074

 

EUR 1,500 million

 

1,494

 

1,495

2.517%

 

2.375%

 

Hybrid bond 2015 / 20225 / 2075

 

EUR 1,300 million

 

1,290

 

1,292

3.093%

 

3.000%

 

Hybrid bond 2014 / 20205 / 2075

 

EUR 1,750 million

 

1,745

 

1,746

 

 

 

 

Bayer Capital Corporation B.V., Netherlands

 

 

 

 

 

 

1.333%

 

1.250%

 

DIP bond 2014 / 2023

 

EUR 500 million

 

497

 

498

6.061%

 

5.625%

 

Mandatory convertible notes6 2016 / 2019

 

EUR 4,000 million

 

 

 

 

 

 

Bayer Corporation, U.S.A.

 

 

 

 

 

 

6.670%

 

6.650%

 

Notes 1998 / 2028

 

US$ 350 million

 

351

 

307

 

 

 

 

Bayer Holding Ltd., Japan

 

 

 

 

 

 

0.858%

 

0.816%

 

DIP bond 2012 / 2017

 

JPY 30 billion

 

243

 

1.493%

 

1.459%

 

DIP bond 2010 / 2017

 

JPY 10 billion

 

81

 

3.654%

 

3.575%

 

DIP bond 2008 / 2018

 

JPY 15 billion

 

122

 

111

0.629%

 

0.594%

 

DIP bond 2013 / 2019

 

JPY 10 billion

 

81

 

74

0.270%

 

0.230%

 

DIP bond 2017 / 2021

 

JPY 10 billion

 

 

74

0.301%

 

0.260%

 

DIP bond 2017 / 2022

 

JPY 10 billion

 

 

74

 

 

 

 

Bayer Nordic SE, Finland

 

 

 

 

 

 

Floating1

 

Floating1

 

DIP bond 2014 / 2017

 

EUR 500 million

 

500

 

 

 

 

 

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

 

 

 

 

 

 

Floating2

 

Floating2

 

Notes 2014 / 2017

 

US$ 400 million

 

379

 

1.615%

 

1.500%

 

Notes 2014 / 2017

 

US$ 850 million

 

806

 

2.564%

 

2.375%

 

Notes 2014 / 2019

 

US$ 2,000 million

 

1,889

 

1,662

3.096%

 

3.000%

 

Notes 2014 / 2021

 

US$ 1,500 million

 

1,419

 

1,247

3.579%

 

3.375%

 

Notes 2014 / 2024

 

US$ 1,750 million

 

1,642

 

1,444

 

 

 

 

Covestro AG, Germany

 

 

 

 

 

 

Floating

 

Floating

 

DIP bond 2016 / 2018

 

EUR 500 million

 

500

 

1.076%

 

1.000%

 

DIP bond 2016 / 2021

 

EUR 500 million

 

497

 

1.782%

 

1.750%

 

DIP bond 2016 / 2024

 

EUR 500 million

 

497

 

 

 

 

 

Total

 

 

 

15,946

 

12,391

Debt Issuance Programme

An important means of external financing are the bonds issued under the Debt Issuance Program (DIP) DIP is a documentation platform that has enabled Bayer to flexibly issue notes in various currencies and with different maturities. .

Bayer Holding Ltd., Japan, issued two JPY 10 billion bonds under the DIP in May 2017.

Hybrid bonds

The Hybrid bond A hybrid bond is a corporate bond with equity-equivalent 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. issued by Bayer AG are subordinated, and 50% of their amount is treated by Moody’s and S & P Global Ratings as equity. They therefore have a more limited effect on the Group’s rating-relevant debt indicators than senior borrowings.

Mandatory convertible notes

On November 22, 2016, Bayer Capital Corporation B.V. placed subordinated mandatory convertible notes in the amount of €4,000 million, which will be converted into no-par shares of Bayer AG at maturity. The notes represented the first part of the equity component of the financing for the planned acquisition of Monsanto. The mandatory convertible notes were recognized in capital reserves and other financial liabilities.

Exchangeable bond

On June 14, 2017, Bayer AG issued bonds with a nominal value of €1,000 million which mature in 2020. The issue price was 105.25 percent of the principal amount and the initial exchange price was fixed at €80.93. These bonds can be settled in cash, by delivery of Covestro shares or by a combination thereof at or prior to maturity. Applying the fair value option under IAS 39.11A, these debt instruments were designated as financial liabilities at fair value through profit or loss upon first-time recognition.

Bayer AG guarantees all the bonds issued by subsidiaries.

Lease liabilities

Lease payments totaling €365 million (2016: €609 million), including €127 million (2016: €173 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

 

 

Dec. 31, 2016

 

 

Lease payments

 

Interest component

 

Liabilities under finance leases

Maturity

 

€ million

 

€ million

 

€ million

2017

 

88

 

29

 

59

2018

 

76

 

24

 

52

2019

 

68

 

21

 

47

2020

 

59

 

17

 

42

2021

 

57

 

15

 

42

2022 or later

 

261

 

67

 

194

Total

 

609

 

173

 

436

Lease Liabilities

 

 

Dec. 31, 2017

 

 

Lease payments

 

Interest component

 

Liabilities under finance leases

Maturity

 

€ million

 

€ million

 

€ million

2018

 

49

 

17

 

32

2019

 

44

 

13

 

31

2020

 

39

 

12

 

27

2021

 

31

 

11

 

20

2022

 

25

 

10

 

15

2023 or later

 

177

 

64

 

113

Total

 

365

 

127

 

238

Other financial liabilities

Other financial liabilities as of December 31, 2017, comprised €525 million (2016: €652 million) relating to the mandatory convertible notes issued in November 2016, and €292 million (2016: €0 million) in commercial paper.

Other information

As of December 31, 2017, the Group had undrawn credit facilities at its disposal totaling €47 billion (2016: €55 billion), including €43 billion, or US$52 billion (2016: €50 billion, or US$53 billion), in bridge financing for the planned acquisition of Monsanto.

Further information on the accounting for liabilities from derivatives is given in Note “Financial Instruments”.

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