Südzucker International Finance B. V. Südzucker AG ... - Xetra

Financial instruments are normally subject to interest rate change risks, foreign currency risks and credit risks, as follows:Interest rate change riskFor fixed-interest rate deposits or loans there is a risk that a change in market interest rates will lead to a change inmarket price (interest-related fair value risk).On the other hand, variable-interest rate deposits or loans are not subject to price risk, as the interest rate is adjustedtimely to market interest rates. However, due to fluctuations in short-term interest rates there is a risk relating to futureinterest payments (interest-related cash flow risk).Currency riskForeign currency risk is the risk of changes in fair values of balance sheet items induced by changes in exchange rates.Credit riskCredit risk is the risk that a counterparty will be unable to pay. Credit risks arising from deposits, securities andreceivables from derivative hedge transactions are minimised by only doing business with counterparties with first-classcreditworthiness.Financial liabilitiesTerms Interest rates Average rates Book valueD millionBonds to 9 years 5.75 %, 6.25 % 5.9 % 816.9Commercial paper to 1 year 2.67 %–2.95 % 2.81 % 254.5Liabilities to banks to 18 years 2.86 %–7.12 % 4.54 % 363.9Bills payable to 1 year – – 0.4Total 5.01% 1,435.7Book values of financial liabilities are the same as their repayment amount.For commercial paper, liabilities to banks and bills payable, book values are the same as their fair values. The fairvalue of bonds is their market value at the end of the year, and amounts to D 893.8 million. All the bonds arefixed-interest, as well as D 62.0 million of the liabilities to banks.F-25