Notes to the Consolidated Financial Statements of the Covestro Group – Notes to the Statement of Financial Position

22. 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. Of the euro bonds issued in March 2016, a fixed-rate tranche with a term until September 2024 (a coupon of 1.75% and a volume of €500 million) was still in the portfolio on the reporting date. The fixed-rate euro bonds issued in 2020 with a total volume of €1.0 billion will mature in February 2026 (a coupon of 0.875% and a volume of €500 million) and in June 2030 (a coupon of 1.375% and a volume of €500 million).

In addition, Covestro published a Green Financing Framework in May 2022, on the basis of which the first green euro bond was issued in November 2022 with a fixed coupon of 4.75% and a volume of €500 million, maturing in November 2028. All the proceeds from the bond issue are to be used to finance sustainable projects.

As of December 31, 2022, the Group had total credit facilities of €2,890 million (previous year: €2,817 million) at its disposal. Of this amount, €2.5 billion is attributable to the five-year syndicated revolving credit facility arranged in March 2020. This credit facility’s term has been extended until March 2027 due to the exercising of two options to extend the term by one year in each case. A feature of the credit line is its link to an ESG (environment, social, and governance) rating: The better (worse) the externally calculated ESG score is, the lower (higher) the interest component of the credit facility.

A total of €350 million (previous year: €275 million) of the existing credit facilities was drawn down, while €2,540 million (previous year: €2,542 million) remained unused.

In October 2022, Covestro issued Schuldschein loans in an amount equivalent to approx. €650 million as a new corporate financing instrument, of which a volume equivalent to €552 million was collected in 2022. The issue is denominated in U.S. dollars and euros. There are a total of 10 tranches with terms of three, five, or seven years and with fixed and variable interest rates. The proceeds from the issue will be used for general corporate financing and to replace short-term with long-term liquidity. The Schuldschein loans are likewise linked to an ESG rating.

Another new financing instrument established in August 2022 was the Euro Commercial Paper Programme (ECPP), allowing the company to issue notes in different currencies and terms of up to one year on a flexible basis. On the reporting date of December 31, 2022, however, there were no commercial papers in the portfolio that were recognized as other financial liabilities.

Financial liabilities consisted of the following:

The majority of the Covestro Group’s financial liabilities are unsecured.

Lease liabilities

Lease payments of €890 million (previous year: €893 million) are to be made to the respective lessors in future years; of this amount, the interest component amounts to €142 million (previous year: €132 million). The lease liabilities mature as follows: