Chemring Group PLC |Annual Report and Accounts 2012

80
Financial statements
Notes to the group financial statements
21. Borrowings continued
Bank
loans and
overdrafts
£m
Loan
notes
£m
Other
loans*
£m
2012
Total
£m
Bank
loans and
overdrafts
£m
Loan
notes
£m
Other
loans*
£m
2011
Total
£m
Borrowings falling due within:
One year 71.6 - 4.1 75.7 81.5 - 6.5 88.0
Borrowings falling due within:
One to two years 0.6 - 1.6 2.2 0.5 - 2.6 3.1
Two to five years 0.3 47.4 1.3 49.0 0.7 - 2.5 3.2
After five years - 213.8 0.1 213.9 - 260.2 0.1 260.3
0.9 261.2 3.0 265.1 1.2 260.2 5.2 266.6
Total borrowings 72.5 261.2 7.1 340.8 82.7 260.2 11.7 354.6
* Includes finance leases and preference shares
In January 2011, the Group completed a refinancing of its bank facilities with a syndicate of five banks. The new Group facilities, which are
unsecured, total £230 million. In addition, the term of the facilities was extended from April 2012 to April 2015, with an option to extend
for twelve months. This revolving credit facility provides access to committed lending and bonding line support. None of the borrowings in
the current or the prior year were secured.
Other loans represent loans held by certain Group companies to fund working capital.
The directors do not believe the fair value of the Group’s borrowings to be materially different to the book values.
There have been no breaches of the terms of the loan agreements or defaults during the current or previous year.
The Group has the following undrawn borrowing facilities in various currencies available in respect of which all conditions precedent have
been met. These facilities are at floating interest rates.
Total undrawn borrowings 143.9 150.1
The Group is subject to two key financial covenants which are tested quarterly, relating to the ratio between underlying earnings before
interest, tax, depreciation and amortisation (‘underlying EBITDA’) and debt (‘debt ratio’), and the ratio between underlying EBITDA and
finance costs (‘interest cover’). The revolving credit facility and the loan note agreements have different covenant compliance calculations
and have therefore been separated out below – the primary difference being that the revolving credit facility uses consolidated net debt
in the calculation, whereas the loan note agreements require consolidated total debt to be used. The Group complied with both these
covenants throughout the year, and the position at the year end is detailed below:
2012 2011
Covenant ratio – revolving credit facility
Maximum allowed ratio of net debt to underlying EBITDA 3.0 3.0
Actual ratio of net debt to underlying EBITDA 2.1 1.6
Minimum allowed ratio of underlying EBITDA to finance costs 4.0 4.0
Actual ratio of underlying EBITDA to finance costs 6.7 9.5
Covenant ratio – loan note agreements
Maximum allowed ratio of consolidated total debt to underlying EBITDA 3.0 3.0
Actual ratio of consolidated total debt to underlying EBITDA 2.8 2.1
Minimum allowed ratio of underlying EBITDA to finance costs 3.5 3.5
Actual ratio of underlying EBITDA to finance costs 6.9 10.4
2012
£m
2011
£m
Chemring Group PLC Report and Accounts 2012