| Current |
2006
£m |
2005
£m |
| Bank overdraft |
0.5 |
19.3 |
| Obligations under finance leases (note 22) |
0.2 |
0.2 |
| Unsecured loan notes |
22.2 |
2.2 |
| Asset-based securitised financing (see below) |
27.5 |
28.2 |
| |
50.4 |
49.9 |
| Non-current |
|
|
| Unsecured loan notes |
- |
20.5 |
| Obligations under finance leases (note 22) |
0.3 |
- |
| Bonds |
372.0 |
198.6 |
| Currency swaps |
6.4 |
2.6 |
| |
378.7 |
221.7 |
The acquisition of BDML included ‘insurance debtors subject to a securitisation agreement’. The purpose of this arrangement is to securitise customer receivables, derived through the provision of instalment credit facilities to insurance customers of the company. The company sells said receivables, with no immediate effect on the income statement, for cash to a third party (Gresham in this case). Gresham takes on the rights and responsibilities of these receivables such that the terms of this agreement dictate that Gresham has no recourse to BDML beyond 14% of the total receivable securitised.
The obligations under finance leases are secured on the assets being financed. The bank overdraft, bonds and loan notes are unsecured. The bank overdraft disclosed in the current year is held with The Royal Bank of Scotland and therefore there is no right of set off. It bears interest at standard rates. The bank overdraft disclosed as a comparative bears interest at Barclays Bank standard rates based on LIBOR and the bonds effectively bear interest at a rate based on 6 month LIBOR.
Loan notes were issued pursuant to the satisfaction of consideration due in relation to the acquisition of a subsidiary undertaking. Loan notes issued during the year amounted to £nil (2005: £nil) and £0.5m (2005: £4.4m) were repaid. There is £1.7m of loan notes repayable on demand with a final maturity date of 31 May 2007. Additionally loan notes of value £20.5m will be repaid in the second quarter of 2007. The interest rates attributable to the loan notes are fixed for each new issue. These rates range from 3.45% to 5.25%.
The Group has issued guaranteed unsecured bonds as follows:
| Bond |
Interest
rate
% |
Denomination |
Value
£m |
Maturity |
| Issued 2002 |
|
|
|
|
| Series B |
6.44 |
GBP* |
55.0 |
20 June 2009 |
| Issued 2005 |
|
|
|
|
| Series A |
0.525 above 6m LIBOR |
GBP |
50.0 |
28 September 2013 |
| Series B |
0.525 above 6m LIBOR |
GBP |
25.0 |
28 September 2015 |
| Total of sterling denominated bonds |
|
|
130.0 |
|
| |
|
|
US$m |
|
| Issued 2002 |
|
|
|
|
| Series A |
6.10 |
US$** |
66.0 |
20 June 2009 |
| Series C |
6.47 |
US$** |
36.0 |
20 June 2012 |
| Issued 2006 |
|
|
|
|
| Series A |
5.74 |
US$** |
60.0 |
28 June 2013 |
| Series B |
5.88 |
US$** |
130.0 |
28 June 2016 |
| Series A |
5.66 |
US$** |
11.0 |
13 September 2013 |
| Series B |
5.81 |
US$** |
74.0 |
13 September 2016 |
| Series C |
5.77 |
US$** |
60.0 |
13 September 2016 |
| Total of US$ denominated bonds |
|
|
437.0
(GBP £242.0m) |
|
All series are unsecured and rank pari passu in all respects apart from those detailed above.
*The Group has entered into an interest rate swap to convert the interest cost to floating rate based on 6 month LIBOR.
**The Group has entered into currency swaps for the US$ issues to achieve a floating rate of interest based on 6 month LIBOR. Further disclosure on the Group’s use of hedges is included in note 24.
Issue cost incurred was £0.6m and this is being spread over the life of the bonds to their maturity.