21 Borrowings

Currency Maturity
dates 		Interest
rates 		2010
£m 		2009
£m
Eurobonds Euro 2011 to 2021 3.6% to 5.9% 5,064 5,500
UK sterling 2013 to 2040 5.5% to 7.3% 2,626 2,297
Bonds issued pursuant to Rule 144A and RegS under the US Securities Act (as amended) US dollar 2013 to 2018 8.1% to 9.5% 637 620
Floating rate notes Euro 2010 floating rate 467
Other notes Malaysian ringgit 2012 to 2014 4.1% to 4.5% 136 119
Indonesian rupiah 2012 10.5% 96 90
Other currencies 26 25
Syndicated bank loans US dollar 2012 floating rate 442 427
Euro 2012 to 2013 floating rate 382 613
Euro commercial paper 187
Bank loans 629 519
Other loans 47 2
Finance leases 20 35
Overdrafts 145 181
10,250 11,082

The floating rate interest rates referred to in the table above are based on EURIBOR or USD LIBOR plus a margin ranging between 28 and 105 basis points (2009: 28 and 225 basis points).

2010
£m 		2009
£m
Current 1,334 1,370
Non-current 8,916 9,712
10,250 11,082

Current borrowings include interest payable of £242 million at 31 December 2010 (2009: £232 million). Included within non-current borrowings are £2,595 million (2009: £3,019 million) of borrowings subject to fair value hedges where their amortised cost has been increased by £150 million (2009: £96 million) in the table above.

The fair value of borrowings is estimated to be £10,963 million (2009: £11,646 million) and has been determined using quoted market prices or discounted cash flow analysis.

2010
£m 		2009
£m
Amounts secured on Group assets 61 59

Amounts secured include finance leases of £20 million (2009: £35 million) and the remaining amounts are secured on certain property and inventory of the Group (note 10 and note 17).

Borrowings are repayable as follows:

Per balance sheet Contractual gross maturities
2010
£m 		2009
£m 		2010
£m 		2009
£m
Within one year 1,334 1,370 1,389 1,404
Between one and two years 1,057 1,083 1,382 1,440
Between two and three years 1,232 1,895 1,740 2,463
Between three and four years 617 844 1,021 1,199
Between four and five years 1,067 624 1,430 996
Beyond five years 4,943 5,266 7,061 7,264
10,250 11,082 14,023 14,766

The contractual gross maturities in each year include the borrowings maturing in that year together with forecast interest payments on all borrowings which are outstanding for all or part of that year.

Borrowings are denominated in the functional currency of the subsidiary undertaking or other currencies as shown below:

Functional
currency
£m 		US
dollar
£m 		UK
sterling
£m 		Euro
£m 		Canadian
dollar
£m 		Australian
dollar
£m 		Other
currencies
£m 		Total
£m
31 December 2010
Total borrowings 5,111 1,277 329 3,524 1 8 10,250
Effect of derivative financial instruments
– cross-currency swaps 14 (325) (10) 399 78
– forward foreign currency contracts (1,180) (662) 299 1,048 485 (10)
3,931 1,291 4 2,852 300 1,048 892 10,318
31 December 2009
Total borrowings 4,718 1,155 328 4,863 18 11,082
Effect of derivative financial instruments
– cross-currency swaps 14 (325) (10) 413 92
– forward foreign currency contracts (1,289) (726) 413 947 679 24
3,429 1,169 3 4,127 413 947 1,110 11,198

Details of the derivative financial instruments included in these tables are given in note 16.

The exposure to interest rate changes when borrowings are repriced is as follows:

Within
1 year
£m 		Between
1-2 years
£m 		Between
2-3 years
£m 		Between
3-4 years
£m 		Between
4-5 years
£m 		Beyond
5 years
£m 		Total
£m
31 December 2010
Total borrowings 2,179 616 851 617 1,067 4,920 10,250
Effect of derivative financial instruments
– interest rate swaps 1,782 (289) (493) (750) (250)
– cross-currency swaps 419 (342) 77
4,380 327 358 (133) 1,067 4,328 10,327
31 December 2009
Total borrowings 1,439 1,442 1,467 844 624 5,266 11,082
Effect of derivative financial instruments
– interest rate swaps 2,749 (666) (505) (750) (828)
– cross-currency swaps 434 (343) 91
4,622 1,442 801 339 (126) 4,095 11,173

Details of the derivative financial instruments included in these tables are given in note 16.

Effective interest rates are as follows:

2010
£m 		2009
£m 		2010
% 		2009
%
US dollar 1,346 1,223 5.5 5.7
UK sterling 2,646 2,284 6.3 6.3
Euro 5,473 6,780 5.1 4.6
Canadian dollar 9 13 5.4 5.6
Other currencies 776 782 6.8 6.0
10,250 11,082

The values and rates shown above do not reflect the effect of the interest rate and cross-currency swaps detailed in note 16.

Finance lease liabilities per the balance sheet and on a contractual gross maturity basis are payable as follows:

2010 2009
Principal
£m 		Interest
£m 		Total
£m 		Principal
£m 		Interest
£m 		Total
£m
Within one year 11 1 12 17 1 18
Between one and two years 5 5 10 1 11
Between two and three years 2 2 4 4
Between three and four years 1 1 2 2
Between four and five years 1 1
Beyond five years 1 1 1 1
20 1 21 35 2 37

Borrowings facilities

2010
£m 		2009
£m
Undrawn committed facilities expiring
– within one year 282 436
– between one and two years 130
– between two and three years 1,651
– between three and four years
– between four and five years 2,000
2,282 2,217

In December 2010 the Group negotiated a new central banking facility of £2 billion with a final maturity date of December 2015. The existing central banking facility of £1.75 billion, with a final maturity date of March 2012 was cancelled at the same time. The new facility was undrawn as at 31 December 2010.

The Group defines net debt as follows:

2010
£m 		2009
£m
Borrowings (note 21) 10,250 11,082
Derivatives in respect of net debt:
– assets (note 16) (171) (149)
– liabilities (note 16) 149 127
Cash and cash equivalents (note 19) (2,329) (2,161)
Current available-for-sale investments (note 15) (58) (57)
7,841 8,842