Note 17: Net debt

Analysis of net debt by category

in € millions

2015

2016

Bonds issued

2,034

2,531

Other borrowings

127

113

Long-term borrowings

2,161

2,644

Current portion of long-term borrowings

378

45

Debt to credit institutions

48

38

Other

4

4

Short-term borrowings

430

87

Total borrowings

2,591

2,731

Cash and cash equivalents

(1,365)

(1,479)

Net debt

1,226

1,252

AkzoNobel’s is mainly denominated in euro.

The part of long-term borrowings that is due within one year is presented under short-term borrowings. For details on the exposure to interest rate and foreign currency risk, see Note 23.

Bonds issued

in € millions

2015

2016

4% 2011/18 (€800 million)

796

797

2 5/8% 2012/22 (€750 million)

742

743

1 3/4% 2014/24 (€500 million)

496

497

1 1/8% 2016/26 (€500 million)

494

Total

2,034

2,531

The average effective interest rate of the bonds outstanding at year-end 2016 was 2.6 percent (year-end 2015: 2.9 percent).

Aggregated maturities of long-term borrowings

in € millions

2018 – 2021

After 2021

Bonds issued

797

1,734

Other borrowings

49

64

Total

846

1,798

Long-term borrowings

We have a €1.8 billion multi-currency revolving credit facility, which was extended in 2016 by one additional year to 2021. This facility does not contain financial covenants or acceleration provisions that are based on adverse changes in ratings or material adverse change. At year-end 2016 and 2015, this facility has not been drawn.

At year-end 2016 and 2015, none of the borrowings was secured by collateral.

In April 2016, a bond was issued with a nominal value of €500 million maturing in 2026 at a coupon of 1.125 percent.

Financial lease liabilities are included in Other borrowings and aggregated €70 million (2015: €46 million). An amount of €9 million (2015: €5 million) will mature within one year, €30 million will mature in the period 2018 through 2021 and €31 million after 2021.

Short-term borrowings

In April 2016, a bond of £250 million matured. In 2017, no bonds will mature.

We have US dollar and euro commercial paper programs in place, which can be used to the extent that the equivalent portion of the €1.8 billion multi-currency revolving credit facility is not used.

We had no commercial paper outstanding at year-end 2016 and 2015.

Cash and cash equivalents

Short-term investments almost entirely consist of cash loans, time deposits, marketable private borrowings and marketable securities immediately convertible into cash. For more information on credit risk management, see Note 23.

At December 31, 2016, an amount of €30 million in cash and cash equivalents was restricted (2015: €68 million). Restricted cash is defined as cash that cannot be accessed centrally due to regulatory or contractual restrictions.

in € millions

2015

2016

Cash on hand and in banks

771

925

Short-term investments

594

554

Included under cash and cash equivalents in the balance sheet

1,365

1,479

Debt to credit institutions

(48)

(38)

Total per cash flow statement

1,317

1,441

Net debt

in € millions

Long-term

Short-term

Cash

Net debt

Net debt equivalents at January 1, 2015

2,527

811

(1,732)

1,606

Net cash from operating activities

(1,136)

(1,136)

Net cash from investing activities

508

508

Proceeds from borrowings

829

(829)

Borrowings repaid

(1,518)

1,518

Transfers from long-term to short-term

(386)

386

Dividends

281

281

Buy-out of non-controlling interests

2

2

Changes in exchange rates

6

(2)

(18)

(14)

Other changes

14

(76)

41

(21)

Net debt equivalents at December 31, 2015

2,161

430

(1,365)

1,226

Net cash from operating activities

(1,297)

(1,297)

Net cash from investing activities

979

979

Proceeds from borrowings

498

418

(916)

Borrowings repaid

(776)

776

Transfers from long-term to short-term

(46)

46

Dividends

336

336

Buy-out of non-controlling interests

(7)

7

New financial leases

24

4

28

Changes in exchange rates

6

(27)

(14)

(35)

Other changes

8

(8)

15

15

Net debt equivalents at December 31, 2016

2,644

87

(1,479)

1,252

Net debt

Defined as long-term borrowings plus short-term borrowings less cash and cash equivalents.