24.Financing and Financial Liabilities

The €5.0 billion Debt Issuance Program launched in the first quarter of 2016 is a key form of external financing. In fiscal 2016, Covestro placed euro bonds totaling €1.5 billion, of which two fixed-rate tranches with terms until October 2021 (a coupon of 1.00% and a volume of €500 million) and September 2024 (a coupon of 1.75% and a volume of €500 million) remain in the portfolio. An additional €1.0 billion in euro bonds was placed on June 5, 2020. The fixed-rate bonds have terms expiring in February 2026 (a coupon of 0.875% and a volume of €500 million) and June 2030 (a coupon of 1.375% and a volume of €500 million). The proceeds of the bond placement serve to further reinforce Covestro’s liquidity in view of the economic effects of the coronavirus pandemic and to provide funds to repay the existing bond maturing in fiscal 2021.

Effective March 17, 2020, Covestro obtained a new syndicated revolving credit facility totaling €2.5 billion with a term of five years, including two options for extending the term by one year in each case. An important new feature of the credit line is its link to an ESG (environment, social, governance) rating: The better (worse) the externally calculated ESG score is, the lower (higher) the interest component of the credit facility. The new facility replaced the existing revolving credit line of €1.5 billion and, like it, functions as a backup liquidity reserve. On September 30, 2020, Covestro AG arranged another syndicated credit facility in the original amount of €1.7 billion. This second credit facility was reduced on October 26, 2020, and stood at €1.2 billion as of December 31, 2020. This credit facility was used for bridge financing of the purchase price of the announced acquisition of the Resins & Functional Materials (RFM) business from Koninklijke DSM N.V., Heerlen (Netherlands), and was terminated as of January 29, 2021, thanks to Covestro’s strong liquidity position.

Furthermore, Covestro AG obtained a €225 million loan for research and development from the European Investment Bank (EIB) in March 2020. The focus here is, in particular, on sustainability and the circular economy in the European Union. The term of the EIB loan runs until September 30, 2025.

As of December 31, 2020, the Group had total credit facilities of €3,969 million (previous year: €1,510 million) at its disposal. Of this amount, €227 million (previous year: €10 million) was drawn down while €3,742 million (previous year: €1,500 million) remained unused.

Financial liabilities were comprised as follows:

The financial liabilities of the Covestro Group are mainly unsecured.

Lease liabilities

Lease payments of €782 million (previous year: €876 million) are to be made to the respective lessors in future years; of this amount, the interest component amounts to €110 million (previous year: €141 million). The lease liabilities mature as follows: