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Note 28: Long-term borrowings

  Group   Company
£ million 2009 2008   2009 2008
a  Current          
Loans, finance leases and hire purchase arrangements:          
Bank and other loans* 69 113   57 102
Finance leases** 103 64   115 73
Hire purchase arrangements 517 246   517 246
At March 31 689 423   689 421
b  Non-current          
Loans, finance leases and hire purchase arrangements:          
Bank and other loans* 779 764   582 554
Finance leases** 1,979 1,376   2,156 1,567
Hire purchase arrangements 316 611   316 611
Loans from subsidiaries       279 239
At March 31 3,074 2,751   3,333 2,971

* Bank and other loans are repayable up to the year 2019. Bank and other loans of the Group amounting to US$108 million (2008: US$132 million), £382 million (2008: £410 million) and ¥6,915 million (2008: ¥nil) and bank loans of the Company amounting to US$108 million (2008: US$132 million) and £172 million (2008: £189 million) and ¥6,915 million (2008: ¥nil) are secured on aircraft. Euro-sterling notes, other loans and loans from subsidiary undertakings are not secured. Finance leases and hire purchase arrangements are all secured on aircraft or property assets.

** Included in finance leases for the Company is £188 million (2008: £200 million) of finance leases with other subsidiaries of the Group, of which £11 million (2008: £9 million) is classified as current.

c  Bank and other loans

Bank and other loans comprise the following:

  Group   Company
£ million 2009 2008   2009 2008
£250 million fixed rate 8.75 per cent eurobonds 2016 (i) 248 248   248 248
£100 million fixed rate 10.875 per cent eurobonds 2008   61     61
Floating rate sterling mortgage loans secured on aircraft (ii) 187 201   143 153
Floating rate US dollar mortgage loans secured on aircraft (iii) 76 67   76 67
Fixed rate sterling mortgage loans secured on aircraft (iv) 194 209   29 36
Floating rate Japanese yen mortgage loans secured on aircraft (v) 49     49  
Floating rate US dollar mortgage loans not secured on aircraft (vi) 49 40   49 40
European Investment Bank loans (vii) 45 51   45 51
  848 877   639 656
Less: current instalments due on bank loans 69 113   57 102
At March 31 779 764   582 554

(i)  £250 million fixed rate 8.75 per cent unsecured eurobonds 2016 are repayable in one instalment on August 23, 2016.

(ii)  Floating rate sterling mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 0.53 per cent and 0.59 per cent above LIBOR. The loans are repayable between 2015 and 2019.

(iii)  Floating rate US dollar mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 0.40 per cent and 0.99 per cent above LIBOR. The loans are repayable between 2009 and 2016.

(iv)  Fixed rate sterling mortgage loans are secured on specific aircraft assets of the Group and bear interest at 6.14 per cent to 7.35 per cent. The loans are repayable between 2012 and 2018.

(v)  Floating rate Japanese yen mortgage loans are secured on specific aircraft assets of the Group and bear interest of 0.55 per cent above LIBOR. The loans are repayable in March 2014.

(vi)  Floating rate US dollar mortgage loans are not secured on aircraft and bear interest of 0.75 per cent above LIBOR. The loans are repayable in 2014.

(vii)  European Investment Bank loans are secured on certain property assets of the Group and bear interest of between 0.20 per cent below LIBOR and LIBOR. The loans are repayable between 2014 and 2017.

d  Total loans, finance leases and hire purchase arrangements

  Group   Company
million 2009 2008   2009 2008
Bank and other loans:          
Bank:          
US dollar $178 $211   $178 $211
Japanese yen ¥6,915     ¥6,915  
Sterling £427 £461   £217 £240
  £600 £568   £391 £347
Euro-sterling notes:          
Sterling £248 £309   £248 £309
Loans from subsidiary undertakings:          
Euro       €300 €300
        £279 £239
Finance leases:          
US dollar $1,518 $1,205   $1,518 $1,205
Euro €77     €77  
Sterling £948 £834   £1,136 £1,034
  £2,082 £1,440   £2,271 £1,640
Hire purchase arrangements:          
US dollar $72 $89   $72 $89
Japanese yen ¥101,350 ¥112,442   ¥101,350 ¥112,442
Sterling £62 £244   £62 £244
  £833 £857   £833 £857
At March 31 £3,763 £3,174   £4,022 £3,392

e  Obligations under finance leases and hire purchase contracts

The Group uses finance leases and hire purchase contracts principally to acquire aircraft. These leases have both renewal options and purchase options. These are at the option of the Group. Future minimum lease payments under finance leases and hire purchase contracts are as follows:

  Group   Company
£ million 2009 2008   2009 2008
Future minimum payments due:          
Within one year 687 389   707 407
After more than one year but within five years 1,163 1,218   1,252 1,303
In five years or more 1,672 1,268   1,811 1,431
  3,522 2,875   3,770 3,141
Less: Finance charges 607 578   666 644
Present value of minimum lease payments 2,915 2,297   3,104 2,497
The present value of minimum lease payments is analysed as follows:          
Within one year 620 310   632 319
After more than one year but within five years 926 989   981 1,040
In five years or more 1,369 998   1,491 1,138
At March 31 2,915 2,297   3,104 2,497

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