Short-term debt
During 2009, the weighted average interest rate on the bank borrowings was 8.1% (2008: 8.6%). In the Netherlands, the Company issued personnel debentures with a 5-year right of conversion into common shares of Royal Philips Electronics. Convertible personnel debentures may not be converted within a period of 3 years after the date of issue. These convertible personnel debentures were available to most employees in the Netherlands and were purchased by them with their own funds and were redeemable on demand. The convertible personnel debentures become non-convertible debentures at the end of the conversion period. Although convertible debentures have the character of long-term financing, the total outstanding amounts are classified as current portion of long-term debt. At December 31, 2009, an amount of EUR 51 million (2008: EUR 72 million) of convertible personnel debentures was outstanding, with an average conversion price of EUR 22.83. The conversion price varies between EUR 14.19 and EUR 31.59 with various conversion periods ending between January 1, 2010 and December 31, 2013. As of January 1, 2009, Philips no longer issues these debentures. The Company has access to a USD 2.5 billion commercial paper program which was established at the beginning of 2001. The Company also has available seven-year revolving credit facilities for USD 2.5 billion, established in December 2004, that could act as back-up for the commercial paper program and can also be used for general corporate purposes. The Company did not use the commercial paper program or the revolving credit facility during 2009. In addition to the USD 2.5 billion revolving credit facilities, Philips had a EUR 200 million committed undrawn bilateral loan in place since October 30, 2009. The EUR 450 million standby roll-over loan agreement was terminated on November 4, 2009. As of December 31, 2009, Philips did not have any debt outstanding under these facilities. On February 18, 2010, Philips signed a new five-year EUR 1.8 billion revolving credit facility to replace the existing USD 2.5 billion facility. | |||||||||||||||||||||||
