DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. AND ...

Doosan Heavy Industries & Construction Co., Ltd. and SubsidiariesNotes to the Consolidated Financial StatementsFor the years ended December 31, 2012 and 201116. Debentures and Borrowings(1) Debentures as of December 31, 2012 and 2011 are summarized as follows:(In millions of won)ConditionInterestrate (%) 2012 2011Public offered debentures 3.57~8.80% ₩ 1,200,000 930,000Privately placed debentures 4.70~5.52% 100,000 200,000Exchangeable bonds 1.50% 219,999 219,999Subtotal 1,519,999 1,349,999Less current portion of long-term debt (300,000) (380,000)discount on debentures (7,427) (6,944)exchange rights adjustment (32,990) (41,245)Adding redemption premium onexchangeable bond (*1)36,776 36,776₩ 1,216,358 958,586(*1) Exchangeable bond as of December 31, 2012 are summarized as follows:(In millions of won)SettlementdateMaturitydateCouponrateYTMExchangeablerightexerciseperiodExchangeable priceIssuedvalueJune 14,2011June 14,20161.50% 4.50%June 15,2011~ May 14,2016- When stock price is less 5,500 won:6,000 won- When stock price is over 5,500won: 110% of stock price₩ 220,000Exchange amount in this year (1)Ending balance ₩ 219,9991 Terms on early redemptionThe right of early redemption is exercisable as a whole or in part against the face value of exchangeablebonds at the interest payment date in three years after the date of issuance of bonds and each interestpayment date of every six month thereafter.2 Method of maturity paymentCoupon rate for the bond is 1.5%. For the bonds not exchanged until the maturity, 116.7167% of theprincipal amount is paid on June 14, 2016 with yield to maturity rate of 4.5%.3 Calculation of exchange pricePursuant to the issuance contract, in the events of increase of capital stock without consideration, stockdividends or splits, and increase of capital stock with the price less than market price during the periodfrom the date of issuance through one month before maturity, the initial exchange price can be adjustedas of the day before the adjustment occurs. As of December 31, 2012, the exchange price is ₩ 6,000.Number of stock issued by the exercise of exchange right in 2011 was 166 shares.57