sain t-gobain annu al report 2008 annual report

12.1 Perpetual bonds
In 1985, Compagnie de Saint-Gobain issued €125 million worth
of perpetual bonds – 25,000 bonds with a face value of
€5,000 – paying interest at a variable rate indexed to Euribor.
These securities are not redeemable and the remuneration
paid to investors is qualified as interest expense.
At December 31, 2008, 18,496 perpetual bonds had been
bought back and cancelled, and 6,504 perpetual bonds were
outstanding, representing a total face value of €33 million.
12.2 Main changes in longand
short-term debt in 2008
The €2,125 million syndicated line of credit obtained
in October 2007 to finance the Maxit acquisition
was drawn down on March 12, 2008.
A €15 million bank loan obtained in September 2002
was repaid at maturity on July 2, 2008.
On September 16, 2008, Compagnie de Saint-Gobain carried
out a €750 million 7.25% bond issue, due September 16, 2013.
12.3 Financing programs
Compagnie de Saint-Gobain has a number of programs available for medium- and long-term financing (Medium Term Notes)
and short-term financing (Commercial Paper and Billets de Trésorerie).
At December 31, 2008, issuance under these programs was as follows:
Programs Currency Drawdown Authorized Drawdown Drawdown Drawdown
period ceiling at at at at
(in millions of currency) Dec. 31, 2008 Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006
Medium Term Notes EUR 1 to 30 years 10,000 3,917 3,356 968
US commercial paper USD up to 12 months 1,000 * 0 0 100
Euro commercial paper USD up to 12 months 1,000 * 0 0 0
Billets de trésorerie EUR up to 12 months 3,000 690 0 145
(*) Equivalent to €718.6 million based on the exchange rate at December 31, 2008.
In accordance with market practices, Billets de Trésorerie, Euro Commercial Paper and US Commercial Paper are generally issued
with maturities of one to six months.
Syndicated and bilateral lines of credit
Compagnie de Saint-Gobain’s US Commercial Paper, Euro
Commercial Paper and Billets de Trésorerie programs are
backed by a €2,000 million confirmed syndicated line of credit
expiring in November 2011 and seven bilateral credit lines
totaling €680 million at December 31, 2008.
The facility agreements for the bilateral credit lines include
acceleration clauses whereby any drawdowns would become
immediately repayable or the facility would be cancelled
in the following cases:
Failure to comply with either of the following ratios
(assessed annually on a consolidated basis):
– Ratio of net debt to operating income excluding depreciation
and amortization of property, plant and equipment
and intangible assets below 3.75 ;
– Interest cover (income before tax and net borrowing
costs/net borrowing costs) above 3.
These covenants are included in the facility agreements
for three bilateral lines representing €290 million.
Default on bank borrowings in excess of certain ceilings.
No drawdowns were made against any of these facilities
in 2008.
In 2005, a €9 billion syndicated line of credit was obtained
to finance the acquisition of the BPB group and refinance
certain debts of the BPB and Saint-Gobain groups. This facility
is composed of three tranches: a three-year loan, a five-year
loan, and a five-year revolving credit facility. At December 31,
2008, the three- and five-year loans had been repaid in full.
The €500 million portion of the revolving facility granted
for general corporate purposes expiring in August 2010
has not been drawn down and is therefore currently available.
204
Saint-Gobain – Financial Report 2008