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In June 2002 the company has issued a bond for a nominal value of MEUR 100 with a repayment period of 6 years and nominal interest rate of 6% p.a. For this bond an interest swap has been used to hedge the risk from the fixed interest rate of the bond. By this interest swap the fixed interest rate has been changed for the whole repayment period to a variable interest rate based on 1 month’s Euribor.
The Managing Board believes that the exposure to interest rate risk of remaining financial assets and liabilities is negligible. Consequently, additional derivative instruments for hedging of these interest risks are not used within the Group.
The weighted average effective interest rates at the balance sheet date were as follows:
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2003 |
2002 |
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|
|
| Cash on current accounts |
0.9% |
0.8% |
| Short term deposits |
4.1% |
3.0% |
| Securities, short term |
3.9% |
3.7% |
| Securities, long term |
3.1% |
5.2% |
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|
|
| Overdraft on current
accounts |
3.0% |
4.7% |
| Short term loans |
4.1% |
1.0% |
| Long term loans |
5.0% |
3.7% |
| Bond |
3.2% |
4.2% |
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interestrisk-2.htm
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