| 14. | Debt |
a) The Company’s short- and long-term debt consists of the following:
|
At December 31, 2016 |
||||||||||||
|
Currency |
Loan |
Interest rate |
Maturity | Total | ||||||||
|
Senior Notes |
||||||||||||
|
U.S. dollars |
||||||||||||
| Fixed-rate Senior notes (i) | 5.625% | 2017 | Ps. | 12,088,686 | ||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2019 | 15,548,550 | |||||||||
| Fixed-rate Senior notes (i) | 5.500% | 2019 | 7,823,657 | |||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2020 | 44,050,390 | |||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2022 | 33,170,240 | |||||||||
| Fixed-rate Senior notes (i) | 6.375% | 2035 | 20,344,345 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2037 | 7,654,551 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2040 | 25,914,250 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2040 | 15,548,550 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2042 | 23,841,110 | |||||||||
|
|
|
|||||||||||
| Subtotal U.S. dollars | Ps. | 205,984,329 | ||||||||||
|
|
|
|||||||||||
|
Mexican pesos |
||||||||||||
| Domestic Senior notes (ii) | 8.390% | 2017 | Ps. | 2,000,000 | ||||||||
| Domestic Senior notes (ii) | 8.110% | 2018 | 1,750,000 | |||||||||
| Domestic Senior notes (ii) | 8.270% | 2018 | 1,160,109 | |||||||||
| Domestic Senior notes (ii) | 8.600% | 2020 | 7,000,000 | |||||||||
| Domestic Senior notes (ii) | 0.000% | 2025 | 4,133,793 | |||||||||
| Domestic Senior notes (ii) | 8.360% | 2037 | 5,000,000 | |||||||||
| Fixed-rate Senior notes (i) | 6.000% | 2019 | 10,000,000 | |||||||||
| Fixed-rate Senior notes (i) | 6.450% | 2022 | 22,500,000 | |||||||||
| Fixed-rate Senior notes (i) | 7.125% | 2024 | 11,000,000 | |||||||||
| Fixed-rate Senior notes (i) | 8.460% | 2036 | 7,871,700 | |||||||||
|
|
|
|||||||||||
| Subtotal Mexican pesos | Ps. | 72,415,602 | ||||||||||
|
|
|
|||||||||||
|
Euros |
||||||||||||
| Fixed-rate Senior notes (i) | 4.250% | 2017 | Ps. | 10,962,292 | ||||||||
| Fixed-rate Senior notes (i) | 3.750% | 2017 | 21,803,213 | |||||||||
| Fixed-rate Senior notes (i) | 1.000% | 2018 | 13,081,928 | |||||||||
| Fixed-rate Senior notes (i) | 4.125% | 2019 | 21,803,213 | |||||||||
| Exchangeable Bonds (i) | 0.000% | 2020 | 61,961,244 | |||||||||
| Fixed-rate Senior notes (i) | 3.000% | 2021 | 21,803,213 | |||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2021 | 17,399,163 | |||||||||
| Fixed-rate Senior notes (i) | 4.000% | 2022 | 18,067,554 | |||||||||
| Fixed-rate Senior notes (i) | 4.750% | 2022 | 16,352,410 | |||||||||
| Fixed-rate Senior notes (i) | 3.500% | 2023 | 7,047,557 | |||||||||
| Fixed-rate Senior notes (i) | 3.259% | 2023 | 16,352,410 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2024 | 18,532,731 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2026 | 10,901,607 | |||||||||
| Fixed-rate Senior notes (i) | 2.125% | 2028 | 14,172,089 | |||||||||
|
|
|
|||||||||||
| Subtotal Euros | Ps. | 270,240,624 | ||||||||||
|
|
|
|||||||||||
|
Pound sterling |
||||||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2026 | Ps. | 12,791,274 | ||||||||
| Fixed-rate Senior notes (i) | 5.750% | 2030 | 16,628,656 | |||||||||
| Fixed-rate Senior notes (i) | 4.948% | 2033 | 7,674,764 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2041 | 19,186,911 | |||||||||
|
|
|
|||||||||||
| Subtotal Pound sterling | Ps. | 56,281,605 | ||||||||||
|
|
|
|||||||||||
|
Swiss francs |
||||||||||||
| Fixed-rate Senior notes (i) | 2.000% | 2017 | Ps. | 5,493,109 | ||||||||
| Fixed-rate Senior notes (i) | 1.125% | 2018 | 11,189,666 | |||||||||
|
|
|
|||||||||||
| Subtotal Swiss francs | Ps. | 16,682,775 | ||||||||||
|
|
|
|||||||||||
|
Other currencies |
||||||||||||
|
Japanese yen |
||||||||||||
| Fixed-rate Senior notes (i) | 2.950% | 2039 | Ps. | 2,306,643 | ||||||||
|
|
|
|||||||||||
| Subtotal Japanese yen | Ps. | 2,306,643 | ||||||||||
|
|
|
|||||||||||
|
Chilean pesos |
||||||||||||
| Fixed-rate Senior notes (i) | 3.961% | 2035 | Ps. | 4,079,443 | ||||||||
|
|
|
|||||||||||
| Subtotal Chilean pesos | Ps. | 4,079,443 | ||||||||||
|
|
|
|||||||||||
| Subtotal other currencies | Ps. | 6,386,086 | ||||||||||
|
|
|
|||||||||||
|
Hybrid Notes |
||||||||||||
|
Euros |
||||||||||||
| Euro NC5 Series A Capital Securities (iv) | 5.125% | 2073 | Ps. | 19,622,892 | ||||||||
| Euro NC10 Series B Capital Securities (iv) | 6.375% | 2073 | 11,991,767 | |||||||||
|
|
|
|||||||||||
| Subtotal Euros | Ps. | 31,614,659 | ||||||||||
|
|
|
|||||||||||
|
Pound sterling |
||||||||||||
| GBP NC7 Capital Securities (iv) | 6.375% | 2073 | Ps. | 14,070,401 | ||||||||
|
|
|
|||||||||||
| Subtotal Pound sterling | Ps. | 14,070,401 | ||||||||||
|
|
|
|||||||||||
| Subtotal Hybrid Notes | Ps. | 45,685,060 | ||||||||||
|
|
|
|||||||||||
|
Lines of Credit and others |
||||||||||||
|
U.S. dollars |
||||||||||||
| Lines of credit (iii) | 1.500% - 8.500% | 2017 | Ps. | 14,929,806 | ||||||||
|
Mexican pesos |
||||||||||||
| Lines of credit (iii) | TIIE + 0.150% - TIIE + 2.000% | 2017 | Ps. | 15,111,048 | ||||||||
|
Euros |
||||||||||||
| Lines of credit (iii) | 3.525% | 2018 | Ps. | 491,144 | ||||||||
|
Brazilian reals |
||||||||||||
| Lines of credit (iii) | 3.000% - 9.500% | 2018 - 2021 | Ps. | 3,467,091 | ||||||||
|
Chilean pesos |
||||||||||||
| Financial Leases | 8.700% - 8.970% | 2018 - 2027 | Ps. | 126,233 | ||||||||
|
|
|
|||||||||||
| Subtotal lines of credit and others | Ps. | 34,125,322 | ||||||||||
|
|
|
|||||||||||
| Total debt | Ps. | 707,801,403 | ||||||||||
|
|
|
|||||||||||
| Less: Short-term debt and current portion of long-term debt | 82,607,259 | |||||||||||
| Long-term debt | Ps. | 625,194,144 | ||||||||||
|
|
|
|||||||||||
|
At December 31, 2017 |
||||||||||||
|
Currency |
Loan |
Interest rate |
Maturity | Total | ||||||||
|
Senior Notes |
||||||||||||
|
U.S. dollars |
||||||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2019 | Ps. | 14,840,025 | ||||||||
| Fixed-rate Senior notes (i) | 5.500% | 2019 | 7,467,145 | |||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2020 | 42,043,077 | |||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2022 | 31,658,720 | |||||||||
| Fixed-rate Senior notes (i) | 6.375% | 2035 | 19,417,282 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2037 | 7,305,744 | |||||||||
| Fixed-rate Senior notes (i) | 6.125% | 2040 | 39,573,400 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2042 | 22,754,705 | |||||||||
|
|
|
|||||||||||
| Subtotal U.S. dollars | Ps. | 185,060,098 | ||||||||||
|
|
|
|||||||||||
|
Mexican pesos |
||||||||||||
| Domestic Senior notes (ii) | 8.110% | 2018 | Ps. | 1,750,000 | ||||||||
| Domestic Senior notes (ii) | 8.270% | 2018 | 1,160,110 | |||||||||
| Domestic Senior notes (ii) | 8.600% | 2020 | 7,000,000 | |||||||||
| Domestic Senior notes (ii) | 0.000% | 2025 | 4,409,873 | |||||||||
| Domestic Senior notes (ii) | 8.360% | 2037 | 5,000,000 | |||||||||
| Fixed-rate Senior notes (i) | 6.000% | 2019 | 10,000,000 | |||||||||
| Fixed-rate Senior notes (i) | 6.450% | 2022 | 22,500,000 | |||||||||
| Fixed-rate Senior notes (i) | 7.125% | 2024 | 11,000,000 | |||||||||
| Fixed-rate Senior notes (i) | 8.460% | 2036 | 7,871,700 | |||||||||
|
|
|
|||||||||||
| Subtotal Mexican pesos | Ps. | 70,691,683 | ||||||||||
|
|
|
|||||||||||
|
Euros |
||||||||||||
| Fixed-rate Senior notes (i) | 1.000% | 2018 | Ps. | 14,252,360 | ||||||||
| Fixed-rate Senior notes (i) | 4.125% | 2019 | 23,753,933 | |||||||||
| Exchangeable Bonds (i) | 0.000% | 2020 | 67,504,878 | |||||||||
| Fixed-rate Senior notes (i) | 3.000% | 2021 | 23,753,933 | |||||||||
| Fixed-rate Senior notes (i) | 3.125% | 2021 | 18,727,775 | |||||||||
| Fixed-rate Senior notes (i) | 4.000% | 2022 | 19,333,685 | |||||||||
| Fixed-rate Senior notes (i) | 4.750% | 2022 | 17,815,450 | |||||||||
| Fixed-rate Senior notes (i) | 3.500% | 2023 | 7,594,262 | |||||||||
| Fixed-rate Senior notes (i) | 3.259% | 2023 | 17,815,450 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2024 | 20,190,843 | |||||||||
| Fixed-rate Senior notes (i) | 1.500% | 2026 | 17,815,450 | |||||||||
| Fixed-rate Senior notes (i) | 2.125% | 2028 | 15,440,057 | |||||||||
|
|
|
|||||||||||
| Subtotal Euros | Ps. | 263,998,076 | ||||||||||
|
|
|
|||||||||||
|
Pound sterling |
||||||||||||
| Fixed-rate Senior notes (i) | 5.000% | 2026 | Ps. | 13,368,884 | ||||||||
| Fixed-rate Senior notes (i) | 5.750% | 2030 | 17,379,549 | |||||||||
| Fixed-rate Senior notes (i) | 4.948% | 2033 | 8,021,330 | |||||||||
| Fixed-rate Senior notes (i) | 4.375% | 2041 | 20,053,326 | |||||||||
|
|
|
|||||||||||
| Subtotal Pound sterling | Ps. | 58,823,089 | ||||||||||
|
|
|
|||||||||||
|
Swiss francs |
||||||||||||
| Fixed-rate Senior notes (i) | 1.125% | 2018 | Ps. | 11,169,748 | ||||||||
|
|
|
|||||||||||
| Subtotal Swiss francs | Ps. | 11,169,748 | ||||||||||
|
|
|
|||||||||||
|
Brazilian reals |
||||||||||||
| Domestic Senior notes (ii) | 102.9% of CDI | 2020 | Ps. | 8,972,204 | ||||||||
| Domestic Senior notes (ii) | 102.4% of CDI | 2019 | 5,981,469 | |||||||||
| Domestic Senior notes (ii) | 103.9% of CDI | 2019 | 5,981,469 | |||||||||
|
|
|
|||||||||||
| Subtotal Brazilian reals | Ps. | 20,935,142 | ||||||||||
|
|
|
|||||||||||
|
Other currencies |
||||||||||||
|
Japanese yen |
||||||||||||
| Fixed-rate Senior notes (i) | 2.950% | 2039 | Ps. | 2,282,608 | ||||||||
|
|
|
|||||||||||
| Subtotal Japanese yen | Ps. | 2,282,608 | ||||||||||
|
|
|
|||||||||||
|
Chilean pesos |
||||||||||||
| Fixed-rate Senior notes (i) | 3.961% | 2035 | Ps. | 4,312,424 | ||||||||
|
|
|
|||||||||||
| Subtotal Chilean pesos | Ps. | 4,312,424 | ||||||||||
|
|
|
|||||||||||
| Subtotal other currencies | Ps. | 6,595,032 | ||||||||||
|
|
|
|||||||||||
|
Hybrid Notes |
||||||||||||
|
Euros |
||||||||||||
| Euro NC5 Series A Capital Securities (iv) | 5.125% | 2073 | Ps. | 21,378,540 | ||||||||
| Euro NC10 Series B Capital Securities (iv) | 6.375% | 2073 | 13,064,663 | |||||||||
|
|
|
|||||||||||
| Subtotal Euros | Ps. | 34,443,203 | ||||||||||
|
|
|
|||||||||||
|
Pound sterling |
||||||||||||
| GBP NC7 Capital Securities (iv) | 6.375% | 2073 | Ps. | 14,705,772 | ||||||||
|
|
|
|||||||||||
| Subtotal Pound sterling | Ps. | 14,705,772 | ||||||||||
|
|
|
|||||||||||
| Subtotal Hybrid Notes | Ps. | 49,148,975 | ||||||||||
|
|
|
|||||||||||
|
Lines of Credit & others |
||||||||||||
|
U.S. dollars |
||||||||||||
| Lines of credit (iii) | L + 0.020% & 1.500% -7.250% | 2018 - 2019 | Ps. | 14,474,350 | ||||||||
|
Mexican pesos |
||||||||||||
| Lines of credit (iii) | TIIE + 0.040% -TIIE + 0.175% | 2018 - 2019 | Ps. | 12,500,000 | ||||||||
|
Brazilian reals |
||||||||||||
| Lines of credit (iii) | 107.000% of CDI -TJLP + 3.500% & 3.000% -9.500% | 2018 - 2027 | Ps. | 4,389,260 | ||||||||
|
Chilean pesos |
||||||||||||
| Financial Leases | 8.700% - 8.970% | 2018 - 2027 | Ps. | 99,446 | ||||||||
|
|
|
|||||||||||
| Subtotal Lines of Credit and others | Ps. | 31,463,056 | ||||||||||
|
|
|
|||||||||||
| Total debt | Ps. | 697,884,899 | ||||||||||
|
|
|
|||||||||||
| Less: Short-term debt and current portion of long-term debt | 51,745,841 | |||||||||||
|
|
|
|||||||||||
| Long-term debt | Ps. | 646,139,058 | ||||||||||
|
|
|
|||||||||||
L = LIBOR (London Interbank Offer Rate)
TIIE = Mexican Interbank Rate
EURIBOR = Euro Interbank Offered Rate
CDI = Brazil Interbank Deposit Rate
TJLP = Brazil Long Term Interest Rate
Interest rates on the Company’s debt are subject to variances in international and local rates. The Company’s weighted average cost of borrowed funds at December 31, 2016, and December 31, 2017 was approximately 4.2% and 4.3%, respectively.
Such rates do not include commissions or the reimbursements for Mexican tax withholdings (typically a tax rate of 4.9%) that the Company must pay to international lenders.
An analysis of the Company’s short-term debt maturities as of December 31, 2016, and December 31, 2017, is as follows:
| 2016 | 2017 | |||||||
|
Domestic Senior Notes |
Ps. 2,000,000 | Ps. 2,910,110 | ||||||
|
International Senior Notes |
50,955,191 | 26,084,386 | ||||||
|
Lines of credit |
29,619,908 | 22,714,383 | ||||||
|
Financial Leases |
32,160 | 36,962 | ||||||
|
|
|
|
|
|||||
|
Total |
Ps. 82,607,259 | Ps. 51,745,841 | ||||||
|
|
|
|
|
|||||
|
Weighted average interest rate |
5.1% | 4.0% | ||||||
|
|
|
|
|
|||||
The Company’s long-term debt maturities as of December 31, 2017 are as follows:
|
Years |
Amount | |||
|
2019 |
Ps. | 76,492,210 | ||
|
2020 |
126,769,569 | |||
|
2021 |
42,453,673 | |||
|
2022 and thereafter |
400,423,606 | |||
|
|
|
|||
|
Total |
Ps. | 646,139,058 | ||
|
|
|
|||
(i) Senior Notes
The outstanding Senior Notes at December 31, 2016, and December 31, 2017, are as follows:
|
Currency* |
2016 | 2017 | ||||||
|
U.S. dollars |
Ps. 205,984,329 | Ps. 185,060,098 | ||||||
|
Mexican pesos |
72,415,602 | 70,691,683 | ||||||
|
Euros** |
270,240,624 | 263,998,076 | ||||||
|
Pound sterling** |
56,281,605 | 58,823,089 | ||||||
|
Swiss francs |
16,682,775 | 11,169,748 | ||||||
|
Japanese yens |
2,306,643 | 2,282,608 | ||||||
|
Brazilian reals |
— | 20,935,142 | ||||||
|
Chilean pesos |
4,079,443 | 4,312,424 | ||||||
| * | Thousands of Mexican pesos |
| ** | Includes secured and unsecured senior notes. |
(ii) Domestic Senior Notes
At December 31, 2016, and December 31, 2017, debt under Domestic Senior Notes aggregated to Ps. 21,044 million and Ps. 40,255 million, respectively. In general these issues bear a fixed-rate or floating rate determined as a differential on the TIIE and CDI rate.
(iii) Lines of credit
At December 31, 2016, and December 31, 2017, debt under lines of credit aggregated to Ps. 33,999 million and Ps. 31,364 million, respectively.
The Company has two undrawn revolving syndicated facilities –one for the Euro equivalent of U.S. 2,000 million and the other for U.S. 2,500 million maturing in 2021 and 2019, respectively. These loans bear interest at variable rates based on LIBOR and EURIBOR. Telekom Austria has also an undrawn revolving syndicated facility in Euros for 1,000 million at a variable rate based on EURIBOR that matures in 2019.
(iv) Hybrid Notes
In September 2013 the Company issued three series of Capital Securities (hybrid notes) maturing in 2073: two series denominated in Euros for €1,450 million with a coupon of 5.125% and 6.375% respectively, and one series denominated in pound sterling in the amount of £550 million with a coupon of 6.375%. The Capital Securities are deeply subordinated, and when they were issued the principal rating agencies stated that they would treat only half of the principal amount as indebtedness for purposes of evaluating our leverage (an analysis referred to as 50.0% equity credit). The Capital Securities are subject to redemption at our option at varying dates beginning in 2018 and 2023, respectively, for the euro-denominated series and beginning in 2020 for the sterling-denominated series.
Restrictions
A portion of the debt is subject to certain restrictions with respect to maintaining certain financial ratios, as well as restrictions on selling a significant portion of groups of assets, among others. At December 31, 2017, the Company was in compliance with all these requirements.
A portion of the debt is also subject to early maturity or repurchase at the option of the holders in the event of a change in control of the Company, as defined in each instrument. The definition of change in control varies from instrument to instrument; however, no change in control shall be considered to have occurred as long as its current shareholders continue to hold the majority of the Company’s voting shares.
Covenants
In conformity with the credit agreements, the Company is obliged to comply with certain financial and operating commitments. Such covenants limit in certain cases, the ability of the Company or the guarantor to: pledge assets, carry out certain types of mergers, sell all or substantially all of its assets, and sell control of Telcel.
Such covenants do not restrict the ability of AMX’s subsidiaries to pay dividends or other payment distributions to AMX. The more restrictive financial covenants require the Company to maintain a consolidated ratio of debt to EBITDA (defined as operating income plus depreciation and amortization) that does not exceed 4 to 1, and a consolidated ratio of EBITDA to interest paid that is not below 2.5 to 1 (in accordance with the clauses included in the credit agreements).
Several of the financing instruments of the Company may be accelerated, at the option of the debt holder in the case that a change in control occurs.
At December 31, 2017, the Company was in compliance with all the covenants.