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Financial Notes

Reports 2002 > Financials 2002 > Financial Notes > Note 19 - Borrowings


Financial Notes

Consolidated Financial Statements
Note 19 - Borrowings

Country/Area Breakdown

Repayment Schedule of Long-term Debt

Bonds Loans in Long-term Debt

Short-term Borrowings

Finance Lease Liabilities

Loans from international credit institutions consist of borrowings with varying maturities, the latest being in 2023, and with either fixed or floating interest rates ranging from 1.00% (1.68%) to 9.99% (9.99%). The majority of Group loans are denominated in Euros, the principal other currencies being Swedish Kronas and US Dollars. At 31 December 2002 the Group's unused credit facilities totalled EUR 1 625.1 (EUR 2 809.4) million.

In 2002 Stora Enso bought back bonds with a nominal value of SEK 797 (EUR 87.1) million, resulting in a loss in financial items of SEK 4.7 (EUR 0.5) million, USD 35 (EUR 37.0) million at par and EUR 88.0 million resulting in a loss of EUR 2.2 million. Purchases were financed from the strong positive cash flow of the Group.

During 2001 Stora Enso bought back bonds with a nominal value of SEK 924 (EUR 99.3) million with a gain in financial items of SEK 10.7 (EUR 1.2) million, USD 3 (EUR 3.4) million with a loss of USD 0.3 (EUR 0.3) million and EUR 3 million resulting in a loss of EUR 0.1 million.

In 2000 Stora Enso bought back debt with a nominal value of SEK 1 200 (EUR 141) million, resulting in a gain in financial items of SEK 18 (EUR 2.1) million. The purchase was financed with a new SEK bond issue and, in connection with the early debt repayment, the Group terminated swaps hedging these issues.

Net interest-bearing liabilities are designated as such on the Balance Sheet and amounted to EUR 3 055.1 (EUR 4 819.9) million at 31 December 2002; most of this net liability is represented by long-term debt. The breakdown of net interest-bearing liabilities and operating capital by principal country/area is detailed below:

Country/Area Breakdown
	As at 31 December
	2000	2001	2002	2000	2001	2002
	Net Interest-bearing			Operating
EUR million	Liabilities			Capital

Euro area	2 486.3	-593.2	193.0	6 477.5	6 570.1	6 415.3
Sweden	838.8	1 409.9	1 017.6	3 244.3	2 799.0	2 773.8
USA	1 643.5	3 351.1	1 659.7	5 638.5	5 503.9	3 157.1
Canada	-0.9	-29.9	-35.4	643.2	613.1	447.9
China	-	228.8	176.0	225.8	252.7	203.6
UK	-56.0	12.8	-25.4	79.2	92.7	24.9
Other	271.0	440.4	69.6	248.4	274.9	249.0
Total	5 182.7	4 819.9	3 055.1	16 556.9	16 106.4	13 271.6

Repayment Schedule of Long-term Debt

	As at 31 December
EUR million	2003	2004	2005	2006	2007	2008+	Total

Bond loans	219.3	202.8	115.0	538.5	911.3	1 437.3	3 424.2
Loans from credit institutions	61.6	144.7	64.6	39.3	167.8	236.6	714.6
Pension loans	6.8	0.1	0.1	0.1	0.1	0.5	7.7
Financial lease liabilities	16.3	22.1	28.6	15.9	25.2	564.1	672.2
Other long-term liabilities	2.5	4.3	0.9	0.7	0.6	4.0	13.0
Total Long-term Debt	306.5	374.0	209.2	594.5	1 105.0	2 242.5	4 831.7
Current Liabilities: Repayable within the next 12 months							306.5
Long-term Liabilities: Repayable after 12 months							4 525.2

Due to the short-term nature of most Group financial liabilities, their carrying value is considered to approximate their fair value. However, the carrying value of long-term term debt, exclusive of the current part, is deemed to have a fair value of EUR 4 875.7 (EUR 5 503.9) million as against a carrying value of EUR 4 525.2 (EUR 5 182.0) million.

Bonds Loans in Long-term Debt

Issue /	Description	Interest	Currency	Nominal	Outstanding		Carrying Value
Maturity	of	Rate	of	Value	As at 31 December		As at 31 December
Dates	Bond	%	Bond	Issued	2001	2002	2001	2002
				Currency million			EUR million

Fixed Rate
1991-2006	Series C Senior Notes 2006 *	9.99	USD	50.4	50.4	44.5	60.6	42.5
1993-2003	Series B Senior Notes 2003 *	8.64	USD	65.0	62.0	62.0	70.4	59.1
1993-2003	Swedish Medium Term Note *	8.96	SEK	350.0	328.0	328.0	49.1	40.1
1993-2003	Swedish Medium Term Note *	9.50	SEK	255.0	89.0	89.0	13.3	10.9
1993-2004	Series B Senior Notes 2004 *	7.11	USD	7.0	7.0	7.0	8.1	7.1
1993-2019	Series C Senior Notes 2019 *	8.60	USD	50.0	50.0	50.0	56.7	47.6
1994-2004	Swedish Medium Term Note *	8.00	SEK	500.0	50.0	50.0	5.9	5.8
1996-2006	Swedish Medium Term Note *	7.90	SEK	470.0	470.0	470.0	86.4	73.0
1997-2004	Senior Notes Series A 2004	6.71	USD	81.0	81.0	81.0	90.7	79.5
1997-2004	Finnish Serial Bond 1/1997 *	6.00	FIM	1 484.0	1 466.2	1 044.0	246.6	175.6
1997-2007	Senior Notes Series B 2007	6.82	USD	102.0	102.0	102.0	112.5	105.9
1997-2009	Senior Notes Series C 2009	6.90	USD	48.5	48.5	48.5	53.2	51.0
1997-2012	Senior Notes Series D 2012	7.00	USD	22.5	22.5	22.5	24.4	23.6
1997-2017	Senior Notes Series E 2017	7.14	USD	23.0	23.0	23.0	24.6	20.7
1997-2017	Euro Medium Term Note *	4.105	JPY	10 000.0	10 000.0	10 000.0	87.2	80.4
1998-2009	Swedish Medium Term Note *	4.00	SEK	264.4	250.0	250.0	26.9	28.8
1998-2009	Senior Notes Series F 2009	6.93	USD	30.0	30.0	30.0	32.7	31.3
1998-2018	Senior Notes Series G 2018	7.24	USD	65.0	65.0	65.0	68.0	57.4
1998-2023	Senior Notes Series H 2023	7.30	USD	65.0	65.0	65.0	66.9	56.5
1999-2006	Swedish Medium Term Note *	5.90	SEK	500.0	43.0	43.0	4.5	4.6
1999-2008	Swedish Fixed Real Rate *	4.00	SEK	100.0	105.3	100.0	10.8	9.5
2000-2003	Euro Medium Term Note *	5.25	SEK	1 000.0	1 000.0	600.0	108.2	65.6
2000-2006	Euro Medium Term Note *	6.25	SEK	2 000.0	2 000.0	2 000.0	214.1	228.3
2000-2007	Euro Bond 6.375 % Notes 2007 *	6.375	EUR	850.0	850.0	850.0	840.7	842.2
2000-2007	Euro Medium Term Note *	6.90	SEK	200.0	200.0	200.0	21.5	21.8
2001-2003	Euro Medium Term Note *	5.25	SEK	500.0	500.0	386.0	54.2	42.3
2001-2006	Euro Medium Term Note *	6.25	SEK	2 000.0	2 000.0	2 000.0	219.3	231.0
2001-2011	Global 7.375 % Notes 2011 *	7.375	USD	750.0	750.0	750.0	862.5	817.2
Loans matured and extinguished in 2002							26.9	-
Total Fixed Rate Bond Loans							3 546.9	3 259.3

Floating Rate
1997-2007	Euro Medium Term Note *	Libor+0.35	FIM	110.0	110.0	110.0	18.5	18.5
1998-2008	Euro Medium Term Note *	Libor+0.35	USD	30.0	30.0	30.0	34.0	28.6
1998-2008	Euro Medium Term Note *	Libor+0.33	USD	40.0	40.0	40.0	45.4	38.1
1999-2005	Swedish Medium Term Note *	Stibor+0.318	SEK	300.0	300.0	300.0	32.3	32.7
1999-2005	Euro Medium Term Note	Stibor+0.45	SEK	110.0	110.0	110.0	11.8	12.0
2000-2007	Swedish Medium Term Note *	Euribor+0.75	EUR	10.0	10.0	10.0	10.0	10.0
2000-2010	Euro Medium Term Note *	Euribor+0.8	EUR	25.0	25.0	25.0	25.0	25.0
Loans matured and extinguished in 2002							21.6	-
Total Floating Rate Bond Loans							198.6	164.9

Total Bond Loans							3 745.5	3 424.2

* Parent company liabilities

Short-term Borrowings

	As at 31 December
EUR million	2000	2001	2002

Short-term loans	1 078.0	917.2	272.5
Derivative financial instruments (Note 21)	-	80.3	71.4
	1 078.0	997.5	343.9
In accordance with IAS 39, financial instrument comparatives for 2000 have not been restated

Group short-term loans are principally denominated in euros (41.0%), Chinese renminbi (32.0%) and US dollars (15.7%), with maturities of between one week and four months. Short-term loans also include commercial paper with applicable weighted average interest rates of 3.4% (3.68%) for the euro.

Finance Lease Liabilities

Stora Enso has a number of finance leasing agreements for machinery and equipment maturing between 2008 and 2015 for which capital costs of EUR 614.4 (EUR 818.7) million are included in machinery and equipment; the depreciation thereon was EUR 53.9 (EUR 66.7) million. The aggregate leasing payments amounted to EUR 76.6 (EUR 80.2) million, the interest element being EUR 34.3 (EUR 44.1) million.

Finance Lease Liabilities

	As at 31 December
EUR million	2000	2001	2002

Minimum lease payments
Less than 1 year	78.5	87.2	78.1
1–5 years	344.3	325.8	252.9
Over 5 years	1 061.4	1 082.6	841.2
	1 484.2	1 495.6	1 172.2
Future finance charges	-703.2	-712.8	-500.0
Present Value of Finance Lease Liabilities	781.0	782.8	672.2

Annual repayments are shown in the Repayment Schedule of Long-term Debt table.

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