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

21. Financing and Financial Debt

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 were used to finance sustainable projects.

As of December 31, 2023, the Group had total credit facilities of €2,700 million (previous year: €2,890 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.

All existing credit lines of €2,700 million remained unused as of the reporting date (previous year: €350 million used, €2,540 million unused).

In October 2022, Covestro placed Schuldschein loans with an equivalent value of around €650 million, of which the final tranche of €100 million was received in the first quarter of 2023. The issue is denominated in U.S. dollars and euros. There were 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.

Part of the Schuldschein loans issued was repaid early in October 2023. The repayment was made in both U.S. dollars and euros. These were Schuldschein instruments with variable interest rates and terms of three, five, and seven years. Liabilities under Schuldschein loans as of December 31, 2023, amounted to €392 million.

Financial debt consisted of the following:

The Covestro Group’s financial debt is unsecured.

Lease Liabilities

Lease payments of €886 million (previous year: €890 million) are to be made to the respective lessors in future years; of this amount, the interest component amounts to €143 million (previous year: €144 million). The lease liabilities mature as follows: