Our performance in 2009 - Sappi

168
Notes to the group annual financial statements continued
30. Financial instruments continued
(US$ equivalent in millions)
Swiss Franc
Expected maturity date
2010 2011 2012 2013 2014 2015+
Total
carry-
ing
value
2009
fair
value
Fixed rate – – – – – – –
Average interest rate (%) – – – – – –
Variable rate – – – – – – – – 151 151
2008
carry-
Average interest rate (%) – – – – – – – 3.26
Total
Fixed rate 104 250 878 329 627 610 2,798 3,095 1,028 990
Average interest rate (%) 6.34 9.21 8.06 9.49 12.32 10.02 9.65 6.47
Variable rate 497 11 12 9 – – 529 528 1,625 1,531
Average interest rate (%) 2.55 5.35 5.35 5.35 – – 2.72 5.66
Fixed and variable 601 261 890 338 627 610 3,327 3,623 2,653 2,521
Current portion 601 602 821 821
Long-term portion 2,726 3,021 1,832 1,700
Total interest-bearing borrowings (refer to note 20) 3,327 3,623 2,653 2,521
The values reported under US Dollar fixed rates (2011 and 2013) represent fair value adjustments to hedged items which
are non-interest-bearing, which is why there are no average rates stated for these amounts.
The fair value of non-current borrowings is estimated by Sappi based on the rates from market quotations for non-current
borrowings with fixed interest rates and on quotations provided by internationally recognised pricing services for notes,
exchange debentures and revenue bonds.
The above mentioned fair values include Sappi’s own credit risk. Please refer to the sensitivity analysis regarding interest rate
risk for additional information regarding Sappi’s rating.
(1) The US Dollar floating interest rates are based on the London Interbank Offered Rate (LIBOR).
(2) The Euro floating interest rates are based on the European Interbank Offered Rate (EURIBOR).
(3) The Rand floating interest rates are predominately based on the Johannesburg Interbank Agreed Rate (JIBAR).
The range of interest rates in respect of all non-current borrowings comprising both fixed and floating rate obligations, is
between 5.35% and 12.32% (depending on currency). At September 2009, 84% of Sappi’s borrowings were at fixed rates
of interest, and 16% were at floating rates. Fixed rates of interest are based on contract rates.
Sappi’s Southern African operations have in the past been particularly vulnerable to adverse changes in short-term domestic
interest rates, as a result of the volatility in interest rates in South Africa. During 2009, domestic interest rates have decreased
from 12.05% to 7.02% for the three-month JIBAR.
ing
value
2008
fair
value