Punch Taverns plc 2007 Annual Report and Financial Statements

20 Financial liabilities continued
Issued by Spirit Issuer plc:
Amounts falling due
within
one year
£m
18 August 2007 19 August 2006
after more
than one
year
£m
Total
£m
Amounts falling due
within
one year
£m
after more
than one
year
£m
Class A1 secured floating rate debenture notes
repayable by September 2026 at LIBOR 1 +0.22%
per annum to September 2011 and LIBOR 1
+0.55% thereafter – 150.0 150.0 – 150.0 150.0
Class A2 secured floating rate debenture notes
repayable by June 2029 at LIBOR 1 +1.08% per annum
to September 2011 and LIBOR 1 +2.7% thereafter – 200.0 200.0 – 200.0 200.0
Class A3 secured fixed / floating rate debenture
notes repayable by September 2019 at 5.860% to
September 2014 and LIBOR 1 +0.55% thereafter – 250.0 250.0 – 250.0 250.0
Class A4 secured fixed / floating rate debenture
notes repayable by March 2025 at 6.582% to
September 2018 and LIBOR 1 +2.775% thereafter – 350.0 350.0 – 350.0 350.0
Class A5 secured fixed / floating rate debenture
notes repayable by December 2032 at 5.472% to
September 2028 and LIBOR 1 +0.75% thereafter – 300.0 300.0 – 300.0 300.0
– 1,250.0 1,250.0 – 1,250.0 1,250.0
Add: premium arising from fair value adjustment 8.0 90.3 98.3 7.8 98.3 106.1
8.0 1,340.3 1,348.3 7.8 1,348.3 1,356.1
1
For 3 month deposits.
Interest rate swaps
The Group has taken out various interest rate swaps to reduce the interest rate risk associated with floating rate loans as follows:
Punch Taverns Finance plc
Interest rate swap agreements have been entered into which swap the LIBOR interest rate on the Class A3(N), Class B3, Class M2(N)
and Class D1 floating rate notes to a fixed rate of 5.954%. The capital amount of these swaps reduces over time to match the
contractual repayment profile of the floating rate notes. At August 2006 interest rate swaps were in place which swapped the LIBOR
interest rate on the Class A3 and Class M2 floating rate notes to a fixed rate of 6.275%.
Punch Taverns Finance B Limited
Interest rate swap agreements have been entered into which swap the LIBOR interest rate on the Class A8 and Class C notes to a fixed
rate of 5.1% and 4.7577% respectively. The capital amount of these swaps reduces over time to match the contractual repayment
profile of the floating rate notes.
Spirit Issuer plc
Interest rate swap agreements have been entered into which swap the LIBOR interest rate to a fixed rate of 6.581% on the Class A1
and Class A2 debenture notes and, after their respective step-up dates, 4.555% on the Class A3, Class A4 and Class A5 debenture
notes. The capital amount of these swaps reduces over time to match the contractual repayment profile of the floating rate notes.
Although these swaps ensure that cash flows are perfectly hedged over the life of the notes they were deemed ineffective at the time
of acquisition of the Spirit group, in accordance with the requirements of IAS 39, and accordingly all future movements in fair value
will be recognised in the income statement.
Bank loans – held by Punch Taverns plc
Interest rate swap agreements have been entered into which swap the LIBOR interest rate to a fixed rate of 4.572%. The capital
amount of these swaps reduces over time to match the contractual repayment profile of the bank loans.
The interest rate exposure on the guaranteed loan notes is mitigated by the interest earned on the cash deposits used as guarantee.
Total
£m
Punch Taverns plc Annual Report and Financial Statements 2007 753