NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
HEINEKEN N.V. ANNUAL REPORT 2( 08
24. Loans and borrowings
To finance the acquisition and to replace existing loans and borrowings of S&N, Heineken entered into an
Acquisition Credit Facility of £3.85 billion ('S&N acquisition facility') with a consortium of nine banks. The S&N
acquisition facility was reduced during the year, and as at 31 December 2008, the facility was fully drawn with
£480 million and €3,560 million (in total €4,064 million) drawn under two tranches. A one-year tranche with
an extension option to two years (€1,144 million) and a five-year tranche of €2,920 million. Interest is based
on Libor/Euribor plus a margin. The S&N acquisition facility is denominated in British Pound. If the amounts
denominated in another currency would exceed a certain British Pound threshold, measured on a recurring
basis, the total facility amount would remain at the original British Pound amount and any shortfall in the
other currency would have to be repaid. As at 31 December 2008, it is the intention to extend the one-year
tranche with the extension option to a total of two years until April 2010.
Heineken has an incurrence covenant in some of its financing facilities. This incurrence covenant is calculated
by dividing Net Debt (calculated in accordance with the consolidation method of the 2007 consolidated
financial statements) by EBITDA (beia), also calculated in accordance with the consolidation method of the
2007 consolidated financial statements and including the pro-forma full-year EBITDA of any acquisitions made
during the previous 12 months. As at 31 December 2008, this ratio was 3.14. The incurrence covenant would
prevent us from conducting further significant debt-financed acquisitions if this would lead to passing the
threshold of 3.50.Following the acquisition of S&N, €4,014 million of interest-bearing loans and borrowings
has been assumed, of which a $1.15 billion S&N US private placement has been renegotiated as per the date
of the acquisition with maturities between 2009 and 2015 and a weighted annual interest rate of 5.4 per cent.
Assumed debt amounting to €1,996 million has been repaid, partly by the S&N acquisition facility.
As per 31 December 2008 €470 million was drawn on the existing revolving credit facility of €2 billion. This
revolving credit facility matures in 2012. Interest is based on EURIBOR plus a margin.
Heineken established a €3 billion ENITN-programme in September 2008. This programme has been approved
by the Luxembourg Commission de Surveillance du Secteur Financier which is the Luxembourg competent
authority for the purpose of Directive 2003/71/EC and facilitates flexible access to Debt Capital Markets
going-forward.
25. Finance lease liabilities
Finance lease liabilities are payable as follows:
Present
Present
Future
value of
Future
value of
minimum
minimum
minimum
minimum
lease
lease
lease
lease
payments
Interest
payments
payments
Interest payments
In millions of EUR
2008
2008
2008
2007
2007 2007
Less than one year
19
(5)
14
2
2
Between one and five years
62
(12)
50
3
3
More than five years
35
(4)
31
2
2
116
(21)
95
7
7
The increase in finance lease liabilities is mainly due to the finance lease liabilities acquired in the business
combination with S&N.
26. Employee benefits
In millions of EUR
2008
2007
Present value of unfunded obligations
266
287
Present value of funded obligations
4,697
2,571
Total present value of obligations
4,963
2,858
Fair value of plan assets
(4,231)
(2,535)
Present value of net obligations
732
323
Actuarial (losses)/gains not recognised
(143)
171
Recognised liability for defined benefit obligations
589
494
Other long-term employee benefits
99
92
688
586