Financial Liabilities

Financial liabilities were comprised as follows:

Financial Liabilities

 

 

Dec. 31, 2017

 

Dec. 31, 2018

 

 

Total

 

Of which current

 

Total

 

Of which current

 

 

€ million

 

€ million

 

€ million

 

€ million

Bonds and notes / promissory notes

 

12,436

 

505

 

35,402

 

2,302

Liabilities to banks

 

534

 

513

 

4,865

 

606

Liabilities under finance leases

 

238

 

32

 

399

 

50

Liabilities from derivatives

 

240

 

221

 

172

 

172

Other financial liabilities

 

970

 

664

 

556

 

552

Total

 

14,418

 

1,935

 

41,394

 

3,682

The financial liabilities of the Bayer Group increased by €27 billion in 2018, mainly due to the acquisition of Monsanto.

A breakdown of financial liabilities by contractual maturity is given below.

Maturities of Financial Liabilities

 

 

Dec. 31, 2017

 

 

€ million

2018

 

1,935

2019

 

2,155

2020

 

1,248

2021

 

2,096

2022

 

89

2023 or later

 

6,895

Total

 

14,418

Maturities of Financial Liabilities

 

 

Dec. 31, 2018

 

 

€ million

2019

 

3,682

2020

 

1,043

2021

 

9,035

2022

 

2,062

2023

 

3,558

2024 or later

 

22,014

Total

 

41,394

In addition to promissory notes in the amount of €45 million (2017: €45 million), the Bayer Group has issued the following bonds and notes:

Bonds and Notes

 

 

Nominal volume as of Dec. 31, 2017

 

Carrying amount as of Dec. 31, 2017

 

Nominal volume as of Dec. 31, 2018

 

Carrying amount as of Dec. 31, 2018

 

 

 

 

€ million

 

 

 

€ million

1

The bonds are issued in the functional currency of the issuing entity (except GBP bonds) and mainly have a fixed coupon.

2

Date of first option to early redeem the bond at par

3

The mandatory convertible notes were allocated to capital reserves and to other financial liabilities

4

Bond can be redeemed in cash, Covestro shares or a combinaton thereof

5

Bonds with a nominal volume of USD2,500 million and €750 million have a variable rate.

Hybrid bonds1

 

 

 

 

 

 

 

 

Hybrid bond 2014 / 20242 / 2074

 

EUR 1,500 million

 

1,495

 

EUR 1,500 million

 

1,496

Hybrid bond 2015 / 20222 / 2075

 

EUR 1,300 million

 

1,292

 

EUR 1,300 million

 

1,293

Hybrid bond 2014 / 20202 / 2075

 

EUR 1,750 million

 

1,746

 

EUR 1,750 million

 

1,748

Mandatory convertible notes1 / exchangeable bond1

 

 

 

 

 

 

 

 

Mandatory convertible notes3 2016 / 2019

 

EUR 4,000 million

 

 

EUR 4,000 million

 

Exchangeable bond4 2017 / 2020

 

EUR 1,000 million

 

1,220

 

EUR 1,000 million

 

996

USD bonds1, 5

 

 

 

 

 

 

 

 

Maturity < 1 year

 

 

 

USD 2,500 million

 

2,178

Maturity > 1 year < 5 years

 

US$ 3,500 million

 

2,909

 

USD 8,250 million

 

7,160

Maturity > 5 years

 

US$ 2,100 million

 

1,751

 

USD 16,414 million

 

14,031

EUR bonds1,5

 

 

 

 

 

 

 

 

Maturity < 1 year

 

 

 

 

Maturity > 1 year < 5 years

 

EUR 750 million

 

753

 

EUR 3,000 million

 

2,996

Maturity > 5 years

 

EUR 500 million

 

498

 

EUR 3,250 million

 

3,222

JPY bonds1

 

 

 

 

 

 

 

 

Maturity < 1 year

 

JPY 15 billion

 

111

 

JPY 10 billion

 

79

Maturity > 1 year < 5 years

 

JPY 30 billion

 

222

 

JPY 20 billion

 

158

Maturity > 5 years

 

 

 

 

GBP bonds1

 

 

 

 

 

 

 

 

Maturity < 1 year

 

GBP 350 million

 

394

 

GBP 350 million

 

Total

 

 

 

12,391

 

 

 

35,357

Hybrid bonds

The hybrid bonds issued by Bayer AG are subordinated, and 50% of their amount is treated by the rating agencies as equity. They therefore have a more limited effect on the Group’s rating-specific debt indicators than senior borrowings.

Mandatory convertible notes

On November 22, 2016, Bayer Capital Corporation B.V. placed subordinated mandatory convertible notes in the amount of €4,000 million, which will be converted into no-par shares of Bayer AG at maturity. The mandatory convertible notes were recognized in capital reserves and other financial liabilities.

Exchangeable bond

On June 14, 2017, Bayer AG issued bonds with a nominal value of €1 billion which mature in 2020. The issue price was 105.25% of the principal amount and the initial exchange price was fixed at €80.93. These bonds can be settled in cash, by delivery of Covestro shares or by a combination thereof at or prior to maturity. The debt instruments were designated as financial liabilities at fair value through profit or loss upon first-time recognition. As of December 31, 2018, the fair value was €1 billion, and Bayer AG held 13.8 million Covestro shares with a fair value of €0.6 billion. Assuming repayment is made in Covestro shares, Bayer AG would have to make an additional payment of €0.4 billion.

Other bonds

Measures undertaken to finance the Monsanto acquisition included the issuance in June 2018 of US$15 billion and €5 billion in bonds via our subsidiaries Bayer U.S. Finance II LLC, Pittsburgh, United States, and Bayer Capital Corporation B.V., Mijdrecht, Netherlands, respectively.

As part of the acquisition, bonds with a nominal volume of US$6.9 billion were taken over from Monsanto. In July 2018, about 83% of these bonds were exchanged for Bayer bonds through a bond exchange program.

Liabilities under finance leases

Lease payments totaling €557 million (2017: €365 million), including €158 million (2017: €127 million) in interest, are to be made under finance leases to the respective lessors in future years.

The liabilities under finance leases mature as follows:

Lease Liabilities

 

 

Dec. 31, 2017

 

 

Lease payments

 

Interest component

 

Liabilities under finance leases

Maturity

 

€ million

 

€ million

 

€ million

2018

 

49

 

17

 

32

2019

 

44

 

13

 

31

2020

 

39

 

12

 

27

2021

 

31

 

11

 

20

2022

 

25

 

10

 

15

2023 or later

 

177

 

64

 

113

Total

 

365

 

127

 

238

Lease Liabilities

 

 

Dec. 31, 2018

 

 

Lease payments

 

Interest component

 

Liabilities under finance leases

Maturity

 

€ million

 

€ million

 

€ million

2019

 

71

 

21

 

50

2020

 

59

 

16

 

43

2021

 

51

 

14

 

37

2022

 

43

 

13

 

30

2023

 

32

 

12

 

20

2024 or later

 

301

 

82

 

219

Total

 

557

 

158

 

399

Other financial liabilities

Other financial liabilities as of December 31, 2018, included €309 million (2017: €525 million) relating to the mandatory convertible notes issued in November 2016. Other financial liabilities as of December 31, 2017, included commercial paper in the amount of €292 million.

Other information

The increase in liabilities to banks mainly resulted from the utilization of the bridge financing for the acquisition of Monsanto. The outstanding acquisition financing as of December 31, 2018, amounted to US$4.9 billion.

As of December 31, 2018, the Group had undrawn credit facilities at its disposal totaling €4.5 billion (2017: €47 billion, of which €43 billion comprised bridge financing for the Monsanto acquisition).

Further information on the accounting for liabilities from derivatives is given in Note “Financial instruments.”

The development of financial liabilities is outlined in Note “Net cash provided by (used in) operating, investing and financing activities.”

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