22. Borrowings
2019 | 2018 | |
|---|---|---|
€m | €m | |
Bank loans | 155.0 | 155.0 |
Private placement loan notes | 50.0 | 50.0 |
Origination fees | (1.1) | (1.0) |
Finance leases | - | 1.0 |
203.9 | 205.0 | |
On demand or within one year | 3.6 | 0.3 |
In the second year | 15.3 | 3.9 |
In the third year | 15.3 | 15.5 |
In the fourth year | 15.3 | 15.4 |
Fifth year and after | 154.4 | 169.9 |
203.9 | 205.0 | |
Less: Amount due for settlement within 12 months | (3.6) | (0.3) |
Amount due for settlement after 12 months | 200.3 | 204.7 |
Obligations under the Group borrowing facilities have been cross guaranteed by certain subsidiaries but are otherwise unsecured.
The currency profile of the Group’s borrowings is set out in note 24 (iii).
Finance Leases
Minimum | Present value of minimum lease payments | |||
|---|---|---|---|---|
2019 | 2018 | 2019 | 2018 | |
€m | €m | €m | €m | |
Amounts payable under finance leases: | ||||
Within one year | - | 0.5 | - | 0.5 |
In the second to fifth years inclusive | - | 0.6 | - | 0.5 |
- | 1.1 | - | 1.0 | |
Less future finance charges | - | (0.1) | - | - |
Present value of lease obligations | - | 1.0 | - | 1.0 |
Less: amount due for settlement within 12months | - | (0.3) | - | (0.3) |
Amount due for settlement after 12 months | - | 0.7 | - | 0.7 |
Amounts outstanding at 31 December 2018 were transferred to lease liabilities on the application of IFRS 16 Leases. The average effective borrowing rate for the financial year ended 31 December 2018 was 5.5%. Interest rates had been fixed at the contract date exposing the Group to fair value interest rate risk. All leases were on a fixed interest repayment basis.
Borrowing facilities
2019 | 2018 | |
|---|---|---|
€m | €m | |
Overdraft and trade guarantee facilities | ||
Amounts utilised – trade guarantee (note 37) | 0.6 | 0.6 |
Amounts undrawn | 15.4 | 15.4 |
Total committed overdraft facilities | 16.0 | 16.0 |
Committed loan facilities | ||
Amounts drawn | 205.0 | 205.0 |
Amounts undrawn | 75.0 | 75.0 |
Total committed loan facilities | 280.0 | 280.0 |
Uncommitted Facilities | 244.8 | 240.2 |
At 31 December the Group had total committed loan and overdraft facilities of €296.0 million (2018: €296.0 million) which comprised of amounts utilised of €205.6 million (2018: €205.6 million) and amounts undrawn of €90.4 million (2018: €90.4 million). Uncommitted facilities relate to bank and private placement shelf agreements which are available for drawing at the discretion of the relevant lender. All borrowings at 31 December 2019 were unsecured and cross guaranteed by certain subsidiaries within the Group.
The Group’s borrowing facilities comprise of the following;
(i) A bank overdraft and trade guarantee facility with permitted drawing amounts of €16.0 million. At 31 December 2019, €0.6 million (2018: €0.6 million) was utilised on this facility by way of trade guarantees and €nil was utilised as an overdraft. Interest rates are calculated by reference to the lender’s prime rate plus a fixed margin. This facility, available for drawing by the Company and certain subsidiaries, is reviewed annually and is repayable on demand.
(ii) A multicurrency revolving credit facility with permitted drawing amounts of €75.0 million, which may be increased to €125.0 million in total at the discretion of the lenders on application. At 31 December 2019, €nil (2018: €nil) was drawn under this facility. Interest rates are arranged at floating rates, calculated by reference to EURIBOR or LIBOR settings depending on currency drawn plus an agreed margin which varies with the Group’s net debt to EBITDA ratio, which creates a cash flow interest rate risk. This facility is available for drawing by the Company and certain subsidiaries and matures on 30 September 2024, having been extended by one year during 2019.
(iii) Amortising term loan facilities totalling €155.0 million made available by the European Investment Bank to fund the construction of two new cruise ferries one of which was delivered in December 2018 and the second being under construction. These facilities have been drawn in full and are repayable in equal instalments over a ten year period commencing December 2020 and ending during 2030. Interest rates are fixed for the duration of the term at rates ranging from 1.616% to 1.724%.
(iv) Multicurrency private placement loan note shelf agreements agreed with a number of investors with a potential drawing amount of €244.8 million. Loan notes for a total amount of €50.0 million with a maturity of 30 November 2024 at an interest rate of 1.40% have been issued under this facility. The remaining balance of €194.8 million total is available for drawing at the discretion of investors for an initial period up to 6 October 2020. Interest rates are set at each drawing date and maturity may extend for up to 15 years.
The weighted average interest rates paid during the financial year were as follows:
2019 | 2018 | |
|---|---|---|
Bank overdrafts | 0.58% | 0.63% |
Bank loans | 1.58% | 1.55% |
The average interest rates reflect the terms of the refinancing arrangements concluded in prior periods. No additional bank loans were drawn during 2019. Interest rates on all bank loans drawn in prior periods were fixed at date of drawdown. The Group’s financing facilities contain provisions that where there is a change in control of the Company, lenders may cancel the facilities and declare all utilisations immediately due and payable. A change of control is where any person or Group of persons acting in concert becomes the owner of more than fifty per cent of the voting share capital of the Company.
In the opinion of the Directors, the Group and Company are in compliance with the covenants contained in its borrowing agreements as of 31 December 2019.