27. Financial liabilities

Financial liabilities comprise the following:

Financial Liabilities	[Table 4.82]
	Dec. 31, 2008		Dec. 31, 2009
	Total	Of which current	Total	Of which current
	€ million	€ million	€ million	€ million
Bonds and notes/promissory notes	10,729	4,355	8,301	375
Liabilities to banks	4,438	1,409	3,251	807
Liabilities under finance leases	535	44	550	44
Liabilities from forward commodity contracts	223	77	91	46
Liabilities from other derivatives	612	104	578	113
Other financial liabilities	333	267	178	104
Total	16,870	6,256	12,949	1,489

The maturities of financial liabilities were as follows:

Maturities of Financial Liabilities			[Table 4.83]
Maturity	Dec. 31, 2008	Maturity	Dec. 31, 2009
	€ million		€ million
2009	6,256	2010	1,489
2010	771	2011	1,867
2011	1,967	2012	2,793
2012	2,740	2013	1,430
2013	1,465	2014	1,785
2014 or later	3,671	2015 or later	3,585
Total	16,870	Total	12,949

The Bayer Group’s financial liabilities are mostly unsecured and – with the exception of the subordinated €1,300 million hybrid bond – are of equal priority.

In addition to promissory notes in the amount of €620 million (2008: €0 million), the Bayer Group has issued the following bonds and notes:

Bonds and Notes				[Table 4.84]
Effective interest rate	Stated rate		Nominal volume	Dec. 31, 2008	Dec. 31, 2009
				€ million	€ million
		Bayer AG
6.075%	6.000%	EMTN bond 2002/2012	EUR 2,000 million	2,025	2,044
5.155%	5.000%	Hybrid bond 2005/2105 (2015)	EUR 1,300 million	1,245	1,267
Floating	Floating	EMTN bond 2006/2009	EUR 1,600 million	1,599	-
4.621%	4.500%	EMTN bond 2006/2013	EUR 1,000 million	995	996
5.774%	5.625%	EMTN bond 2006/2018	GBP 250 million	259	277
5.541%	5.625%	EMTN bond 2006/2018 (increase)	GBP 100 million	106	113
Floating	Floating	EMTN bond 2007/2010	EUR 300 million	300	300
4.464%	4.375%	EMTN bond 2007/2011	EUR 200 million	200	200
4.038%	4.000%	EMTN bond 2008/2011	EUR 200 million	200	200
		Bayer Capital Corp. B.V.
7.117%	6.625%	Mandatory convertible bonds 2006/2009	EUR 2,300 million	2,296	-
4.750%	4.625%	EMTN bond 2009/2014	EUR 1,300 million	-	1,291
		Bayer Corporation
7.180%	7.125%	Notes 1995/2015	US$ 200 million	162	153
6.670%	6.650%	Notes 1998/2028	US$ 350 million	249	241
4.043%	3.750%	EMTN bond 2004/2009	EUR 460 million	460	-
		Bayer Holding Ltd.
1.654%	1.585%	EMTN bond 2007/2010	JPY 10 billion	79	75
2.006%	1.955%	EMTN bond 2007/2012	JPY 15 billion	119	112
Floating	Floating	EMTN bond 2007/2012	JPY 30 billion	237	225
Floating	Floating	EMTN bond 2008/2013	JPY 10 billion	79	75
3.654%	3.575%	EMTN bond 2008/2018	JPY 15 billion	119	112
		Total		10,729	7,681

In March 2009, Bayer Capital Corporation B.V. issued a corporate bond under the multi-currency Euro Medium Term Notes (EMTN) program with a nominal volume of €1,300 million and a maturity of five and a half years. The bond bears a coupon of 4.625%.

In December 2008 Bayer AG issued a bond with a nominal volume of €200 million under the EMTN program. It has a coupon of 4% and matures on January 27, 2011.

In June 2008 Bayer Holding Ltd. issued a floating-rate bond with a nominal volume of JPY 10 billion under the EMTN program. The bond has a maturity of five years and a variable coupon comprising the three-month JPY LIBOR plus 56 basis points. In December 2008, Bayer Holding Ltd. also issued a bond with a nominal volume of JPY 15 billion under this program. This bond has a coupon of 3.575% and matures on December 19, 2018.

In June 2007 Bayer Holding Ltd. launched bond issues under the EMTN program. These comprised a three-year bond with a nominal volume of JPY 10 billion and a coupon of 1.585%, a five-year bond with a nominal volume of JPY 15 billion and a coupon of 1.955%, and a floating-rate note with a nominal volume of JPY 30 billion. The latter has a maturity of five years and a coupon comprising the three-month JPY LIBOR plus 26 basis points.

In April 2007, Bayer AG issued a floating rate bond with a maturity of three years and a nominal volume of €300 million under the EMTN program. The coupon is the three-month EURIBOR rate plus 10 basis points. At the same time, a four-year bond with a nominal volume of €200 million and a coupon of 4.375% was issued.

In May 2006 Bayer AG launched three further bond issues under its multi-currency EMTN program as part of the financing of the Schering acquisition. The first of these was a three-year floating rate note with a nominal volume of €1,600 million, bearing interest at 22.5 basis points above the 3-month EURIBOR rate. This was redeemed at maturity in May 2009. The second issue, with a nominal volume of €1,000 million, has a maturity of seven years and a coupon of 4.5%. A third bond, denominated in sterling (GBP), was issued in the nominal volume of GBP 250 million. A second tranche of GBP 100 million was issued in the same year. This bond has a coupon of 5.625% and matures in 2018. The entire issue has been swapped into euros.

In April 2006, Bayer Capital Corp. B.V. issued a subordinated mandatory convertible bond guaranteed by Bayer AG with a coupon of 6.625% and a nominal volume of €2,300 million as part of the financing of the acquisition of Schering AG, Berlin, Germany. The outstanding units of this bond were converted into 62,604,583 new shares in 2009.

In July 2005, Bayer AG issued a 100-year subordinated hybrid bond with a volume of €1,300 million. This issue matures in 2105 and has a fixed coupon of 5% in the first ten years. Thereafter, interest is calculated quarterly at a floating rate (three-month EURIBOR plus 280 basis points). After the first ten years, Bayer AG has a quarterly option to redeem the bonds at par. The coupon is payable in arrears. This bond is treated as 75% equity by Moody’s and as 50% equity by Standard & Poor’s and therefore improves the Bayer Group’s rating-specific debt indicators.

In January 2004 Bayer Corporation issued a five-year bond with a nominal volume of €460 million and a coupon of 3.75% under the EMTN program. This bond was redeemed at maturity in January 2009.

In April 2002, Bayer AG issued a ten-year bond with a nominal volume of €2,000 million and a fixed coupon of 6% under the EMTN program. Interest is paid annually in arrears.

In February 1998, Bayer Corporation issued notes with a nominal volume of US$350 million to eligible institutional investors. The notes have a maturity of 30 years and a coupon of 6.65%. Interest is paid semi-annually. In October 1995, Bayer Corporation issued notes with a nominal volume of US$200 million and a 7.125% coupon. These 20-year notes mature in October 2015. Interest is paid semi-annually in April and October.

Bayer AG guarantees all the bonds issued by its subsidiaries.

The long-term liabilities to banks principally comprise a syndicated loan raised in 2006 of now €0.9 billion, in connection with the acquisition of Schering AG, Berlin, Germany. This credit facility is provided by a syndicate of eleven financial institutions and bears a variable rate of interest (EURIBOR plus a margin, which has been fixed at 20 basis points since July 2007). This credit facility has a fixed term until March 2011 but can be repaid in full or in part at any time on Bayer’s request.

As of December 31, 2009 the Group had credit facilities at its disposal totaling €7.2 billion (2008: €9.9 billion), of which €3.3 billion (2008: €4.4 billion) was used and €3.9 billion (2008: €5.5 billion) was unused and thus available for borrowing on an unsecured basis.

Lease payments totaling €704 million (2008: €707 million), including €154 million (2008: €172 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:

Leasing Liabilities					[Table 4.85]
	Dec. 31, 2008				Dec. 31, 2009
Maturity	Lease pay- ments	Interest component	Liabilities under finance leases	Maturity	Lease payments	Interest component	Liabilities under finance leases
	€ million	€ million	€ million		€ million	€ million	€ million
2009	70	26	44	2010	71	27	44
2010	60	25	35	2011	67	25	42
2011	59	23	36	2012	58	23	35
2012	51	22	29	2013	217	18	199
2013	207	18	189	2014	36	11	25
2014 or later	260	58	202	2015 or later	255	50	205
Total	707	172	535	Total	704	154	550

Further information on the accounting for liabilities from derivatives is given in Note [30].

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