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Short-term bank borrowings
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Current portion of long-term debt
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During 2008, the weighted average interest rate on the bank borrowings was 8.6% (2007: 7.9%).
In the Netherlands, the Company issues 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 are available to most employees in the Netherlands and are purchased by them with their
own funds and are 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, 2008, an amount of EUR 72 million (2007: EUR 103 million) of convertible
personnel debentures was outstanding, with an average conversion price of EUR 22.95. The conversion price varies between EUR
14.19 and EUR 31.59 with various conversion periods ending between January 1, 2008 and December 31, 2012. As of January 1,
2009, Philips no longer issues those 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 a seven-year revolving credit facility for USD 2.5 billion, established in December 2004, that could act
as a 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 2008.
In addition to the USD 2.5 billion revolving credit facility, Philips has a EUR 500 million standby roll-over loan agreement
in place. The availability of EUR 450 million out of this EUR 500 million is committed until April 29, 2010. As of December
31, 2008, Philips did not have any loans outstanding under these facilities.
As of December 31, 2008 Philips had an undrawn committed bilateral loan of EUR 250 million in place which was fully drawn
in January 2009.
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