a) Borrowings
| 2007 | 2006 | |||
| €m | €m | |||
| Bank overdrafts | 8.8 | 3.3 | ||
| Bank loans and other loans | 150.0 | 7.1 | ||
| Commercial paper | 22.2 | – | ||
| Loan notes | 549.2 | 780.5 | ||
| 730.2 | 790.9 | |||
| Analysed as: | ||||
| Current liabilities (due for settlement within one year) | 31.0 | 231.7 | ||
| Non-current liabilities (due for settlement after more than one year) | 699.2 | 559.2 | ||
| 730.2 | 790.9 |
All borrowings were unsecured as at both 31 December 2007 and 31 December 2006. There are covenants attached to certain of the borrowings.
Bank overdrafts
Bank overdrafts are primarily denominated in euro and sterling and attract floating rate interest by reference to EURIBOR and LIBOR plus margins ranging from
3.5% to 6.5%.
Bank loans and other loans
Bank loans and other loans are primarily floating rate, with a weighted average cost at 31 December 2007 of 5.8% (2006: 4.4%).
Commercial paper
Avis Finance Company plc, an indirect wholly owned subsidiary of the Company, has a commercial paper facility in Belgium, guaranteed by the Company,
which can provide borrowings of up to €200.0 million (2006: €200.0 million). Amounts drawn under the facility attract interest at floating rates by reference to
EURIBOR plus a margin which varies depending upon market conditions at the time of issue.
Loan notes
At 31 December, Avis Finance Company plc has outstanding the following loan notes:
| 2007 | 2006 | |||||||||||||
| Issued | Principal m | Maturing | Principal m | Maturing | ||||||||||
| August 2000 | $48.0 | 2010 | $150.0 | 2007 and 2010 | ||||||||||
| March 2002 | – | – | €25.0 | 2007 | ||||||||||
| June 2002 | €26.8 | 2012 | €26.8 | 2012 | ||||||||||
| July 2002 | – | – | €120.0 | 2007 | ||||||||||
| June 2004 | $240.0 | 2011, 2012 and 2014 | $240.0 | 2011, 2012 and 2014 | ||||||||||
| June 2004 | €65.0 | 2012 | €65.0 | 2012 | ||||||||||
| July 2006 | €250.0 | 2013 | €250.0 | 2013 | ||||||||||
The US$ loan notes bear interest at an average fixed rate of 6.3% (2006: 6.8%). The euro denominated loan notes issued prior to July 2006 bear interest at an average fixed rate of 5.8% (2006: 6.0%). These loan notes are at fixed rates such that their contractual repricing profile is coterminous with their maturity profile.
The €250.0 million Senior Floating Rate Notes bear interest at EURIBOR plus 2.625%. These notes reprice EURIBOR quarterly and include a call option, permitting the Group to repay the notes with effect from 31 July 2008. This option is separately recognised as an embedded derivative at fair value (see Note 26).
Proceeds from the loan notes issued in August 2000 totalling US$48.0 million (2006: US$150.0 million) are swapped to a fixed rate euro liability. Proceeds from the loan notes issued in June 2004 totalling US$240.0 million (2006: US$240.0 million) are swapped to a euro liability at a floating rate of interest until June 2005 and a fixed rate thereafter. Proceeds from the loan notes issued in July 2002 totalling €nil (2006: €60.0 million) are swapped to a floating rate euro liability. Proceeds of the Senior Floating Rate Notes issued in July 2006 totalling €200.0 million (2006: €200.0 million) are swapped into a fixed rate euro liability.
Further details are provided in Note 26.
b) Undrawn borrowings
The committed borrowing facilities of the Group, drawn and undrawn, are as follows:
| 2007 | 2006 | |||||||||||||
| Drawn | Undrawn | Total | Drawn | Undrawn | Total | |||||||||
| €m | €m | €m | €m | €m | €m | |||||||||
| Revolving syndicated credit facility | 188.9 | 391.1 | 580.0 | 37.1 | 542.9 | 580.0 | ||||||||
| Bilateral facilities and finance leases | 272.5 | 321.3 | 593.8 | 281.9 | 265.8 | 547.7 | ||||||||
| 461.4 | 712.4 | 1,173.8 | 319.0 | 808.7 | 1,127.7 | |||||||||
The drawn amount of the revolving syndicated credit facility includes €38.9 million in respect of letters of credit (2006: €37.1 million).
The maturity profile of the Group’s undrawn committed borrowing facilities at 31 December is as follows:
| 2007 | 2006 | |||
| €m | €m | |||
| Expiring within one year | 228.7 | 226.4 | ||
| Expiring within one and two years | 54.6 | 39.4 | ||
| Expiring within two and five years | 429.1 | 542.9 | ||
| 712.4 | 808.7 | |||
At 31 December 2007, there were additional uncommitted facilities available to the Group of €583.0 million (2006: €496.9 million).
c) Deferred consideration
| 2007 | 2006 | |||
| €m | €m | |||
| Current liabilities (due for settlement within one year) | 0.3 | 0.3 | ||
| Non-current liabilities (due for settlement after more than one year) | 30.3 | 32.7 | ||
| 30.6 | 33.0 | |||
Deferred consideration comprises €30.6 million (2006: €33.0 million) arising on the acquisition of shares in Avis Europe Investment Holdings Limited from Avis Inc in 1997. The liability is denominated in sterling, and attracts an interest rate of 8.0% (2006: 8.0%) fixed for 30 years (2006: 31 years) and is repayable in annual instalments (including interest) of £1.9 million.
