| Bond overview This section offers some important information for debt investors. The ability to flexibly use different sources of funds plays a key role in the financing of the Lonza Group. Lonza has therefore established a number of debt instruments. |
The net debt comprises:
| million CHF | 2009 | 2010 | ||
|---|---|---|---|---|
| Long-term debt | ||||
| Straight bond (2009-2013) | 297 | 298 | ||
| Straight bond ( 2010-2016) | 0 | 397 | ||
| Syndicated loan | 497 | 0 | ||
| Due to banks and others: | ||||
| . Banks | 22 | 16 | ||
| . Others | 1 | 23 | 136 | 152 |
| Leasing | 7 | 3 | ||
| Total | 824 | 850 |
| Lonza’s BBB- investment rating maintained post FY 2011 results Following Lonza’s full-year 2011 results presentation on 25. January 2012 a number of the leading Swiss banks have re-evaluated Lonza’s investment rating. Following their analysis, the banks came to the conclusion that Lonza’s BBB / BBB- rating should be maintained. At the end of 2011 the Company’s net debt amounted to CHF 2647 million, giving a net debt-equity ratio of 1.12, as a result of the acquisition of Arch Chemicals in October 2011 which was entirely debt financed. During its 2011 Results Presentation, Lonza communicated that due to the free cash flow generation of the business it was targeting a net debt-equity ratio 0.95 by the end of 2012.This focus on reducing net debt is expected to continue for the next several years. |
| Straight bond (2009-2013) Amount: CHF 300 million, due 27 May 2013. Interest: 3.75% p.a. Annual interest expenses amount to CHF 11.25 million. Following please find the prospectus for the straight bond. |
| Syndicated loan In order to finance the acquisition of the Biopharma and Bioproducts businesses from Cambrex, Lonza signed a syndicated loan of CHF 500 million with a consortium of banks in December 2006; the contract term is five years. It is based on floating rates (libor + margin depending on a margin grid) and was drawn down in February 2007. Lonza hedged the interest rate for the whole five years via interest rate swaps. |
Short-term debt (floating interest rates)
| million CHF | 2009 | 2010 |
|---|---|---|
| Due to banks and other financial institutions | 46 | 45 |
| Others | 166 | 3 |
| Leasing | 3 | 3 |
| Long-term debt due within one year | ||
| 300 | 0 |
| 0 | 499 |
| Total | 515 | 550 |
| Total debt | 1 339 | 1400 |
Loans and advances (floating interest rates)
| million CHF | 2009 | 2010 |
|---|---|---|
| Long-term loans and advances | (32) | (43) |
| Short-term loans and advances | (1) | (1) |
| Cash and cash equivalents | (140) | (248) |
| Total | (173) | (292) |
| Net debt | 1 166 | 1 108 |
| Loans and advances increased in 2009 compared with the prior year, mainly due to the loan granted to the TL Biopharmaceutical Ltd. joint venture. |
Breakdown of debt by currencies
| million CHF | 2009 | 2010 | ||||
|---|---|---|---|---|---|---|
| Average | Average | |||||
| interest | interest | |||||
| rates | rates | |||||
| % | % | % | % | |||
| CHF | 2.54 | 83 | 1 108 | 3.19 | 85 | 1199 |
| CNY | 0.00 | 0 | 0 | 4.37 | 1 | 16 |
| EUR | 1.95 | 0 | 1 | 1.45 | 0 | 1 |
| USD | 2.70 | 16 | 221 | 2.15 | 13 | 175 |
| Other | 1.20 | 1 | 9 | 0.90 | 1 | 9 |
| Total | 100 | 1 139 | 100 | 1400 |
Breakdown of loans and advances by currencies
| million CHF | 2009 | 2010 | ||||
|---|---|---|---|---|---|---|
| Average | Average | |||||
| interest | interest | |||||
| rates | rates | |||||
| % | % | % | % | |||
| CZK | 8.00 | 3 | 1 | 0.00 | 0 | 0 |
| GBP | 0.00 | 0 | 0 | 1.05 | 2 | 1 |
| USD | 2.50 | 97 | 32 | 1.95 | 98 | 43 |
| Total | 100 | 33 | 100 | 44 |
| Interest rates are floating rates. |
Other short-term liabilities
| million CHF | 2009 | 2010 |
|---|---|---|
| Short-Term Provisions | 39 | 6 |
| Accrued liabilities and other payables | 265 | 201 |
| Other interest-free liabilities | 85 | 128 |
| Accrued interest payables | 12 | 16 |
| Total | 401 | 351 |
| "Accrued liabilities and other payables" include accruals and deferred income, such as down-payments from customers and the fair values of financial instruments. In other interest-free liabilities, payments received from customer funding are included.The increase in "Other interest-free liabilities" is due to the increase of "Personnel liabilities" |
| Straight bond (2010-2016) Amount: CHF 400 million, due 2 June 2016. Interest: 3.00 % p.a. payable on 2 June, for the first time on 2 June 2011. The annual interest expenses amount to CHF 12.0 million. Following please find the prospectus for the straight bond. |
