DEBT DETAIL AND EVOLUTION

LEVERAGE RATIO

 

January-June 2020 Net Financial Debt Evolution

See this information in accesible format

 

 

Net financial debt and commitments

Unaudited figures (Euros in millions)

  June 2020 December 2019

Notes:

(1) Includes assets and liabilities defined as net financial debt including Lease liabilities for UK, El Salvador and Costa Rica, that are classified as non-current assets and disposal groups classified as held for sale and liabilities associated with non-current assets held for sale.

Net financial debt includes a positive value of the derivatives portfolio for a net amount of €3.969m, €3.691m included as financial liabilities and €7.660m included as financial assets.

Non-current financial liabilities 44,636 43,288
Current financial liabilities 9,471 9,076
Gross Financial Debt 54,107 52,364
Cash and cash equivalents (6,815) (6,042)
Current financial assets (3.604) (3,118)
Non-current financial assets (5,916) (4,292)
Mark-to-market adjustment by cash flow hedging activities related to debt 222 (388)
Other current assets and liabilities (1,112) (1,192)
Other non-current assets and liabilities 319 413
Net Financial Debt 37,201 37,744
Lease Liabilities 6,436 7,379
Net Financial Debt including Lease liabilities (1) 43,637 45,123

 

FINANCING ACTIVITY

Telefónica, in the current low-interest rate environment, re-financed in H1 20 €9,047m of its debt (excluding commercial paper and short-term bank loans), which allowed the Group to maintain a solid liquidity position and to further extend debt maturities. As of the end of June 2020, the Group has covered debt maturities over the next two years. The average debt life was extended to 11.2 years, from 10.5 years in December 2019.

Financing activities in Q2 20

  • In May, T. Emisiones completed a senior debt issuance in two tranches, €1,250m maturing in 7.25 years and €750m maturing in 12 years with coupons of 1.201% and 1.807%, respectively. At the same time, it launched a tender offer for the purchase of four existing senior bonds references in euros maturing in 2021 and 2022. Total repurchase of bonds amounted to €894m nominal amount.
  • Also in May, T. UK, signed a financing agreement for £4,000m with 32 financial institutions.

After June 30, 2020, in July, T. Emisiones completed a 20 year issuance of €500m with a coupon of 1.864% and Colombia Telecomunicaciones, S.A. ESP. launched a $500m bond maturing in 10 years with a coupon of 4.95%.

Throughout H1 20, Telefónica Group obtained funding amounting to €91m (H1 19: €251m) by extending payment terms with suppliers or the factoring firm.

Telefónica, S.A. and its holding companies continued their issuance activity under the Promissory Notes and Commercial Paper Programmes (Domestic and European), maintaining an outstanding notional balance of €1,911m as of June 2020.

Undrawn, committed credit lines with different credit institutions amounted to €13,279m as of June 2020 (€12,517m maturing in over twelve months), which combined with the cash equivalents position and current financial assets, placed liquidity at €23,698m. In addition to that, the Group has £4bn of additional liquidity to secure the financing of the joint venture of O2 with Virgin Media.

 

 

FINANCIAL DEBT

Total financial liabilities breakdown

Unaudited figures (Euros in millions)

  June 2020
  Bonds and commercial paper Debt with financial institutions Other financial debt (including governments) and net derivatives
Total financial liabilities (1) 94% 9% -4%
(1) Includes positive value of derivatives and other financial debt.

 

Net financial debt structure by currency

Unaudited figures (Euros in millions)

  June 2020
  EUR LATAM GBP USD
Net financial debt structure by currency 67% 16% 16% 1%

 

FINANCIAL EXPENSES

Interest payments decreased by 7.7% y-o-y in H1 20 to €897m, mainly due to debt reduction. The effective cost of interest payments over the last 12 months stood at 3.29% as of June 2020 (excluding the effect of IFRS 16: 3.41%).

NOTE: For further information, please access the January – June 2020 Results Report PDF document [872 KB]