A euro 2.25 billion bond was issued on June 5, 2019 to finance the acquisition of Epsilon. It was issued in three tranches of euro 750 million each, at a fixed rate and in euros, each swapped into US dollars at a fixed rate.
The swaps are qualified as cash flow hedges. The fair value of these swaps was booked in the balance sheet under “Other current receivables and current assets” and/or “Other creditors and current liabilities”. The change in the fair value of these instruments is booked in “Other comprehensive income” and transferred to the income statement as interest on debt is booked and the asset value changed in US dollars. At June 30, 2020, the fair value of these derivative instruments was recorded on the consolidated balance sheet at euro 214 million (euro 87 million at December 31, 2019).
A medium-term loan was also signed on July 1, 2019, in three tranches (a USD 900 million tranche with a 3-year maturity, a euro 150 million tranche with a 4-year maturity; and a euro 150 million tranche with a 5-year maturity). The effective aggregate interest rate for this loan was 1.50% for the first half of 2020.
The other Publicis Groupe SA bonds are issued at a fixed rate and denominated in euros.
The tranche of euro 700 million maturing in December 2021 (Eurobond 2021) and the tranche of euro 600 million maturing in December 2024 (Eurobond 2024) were swapped into US dollars, at a fixed rate, for the purposes of financing the acquisition of Sapient Corporation.
The swaps were qualified as cash flow hedges for intercompany US dollar financing. The fair value of these swaps was booked in the balance sheet under “Other creditors and current liabilities” in the amount of euro 169 million as at June 30, 2020 (euro 112 million as at December 31, 2019). The change in the fair value of these instruments is booked in “Other comprehensive income” and transferred to the income statement as interest on debt is booked and the asset value changed in US dollars.
These financial instruments were recognized at fair value according to the level 2 measurement method that corresponds to observable data other than quoted prices for identical assets or liabilities in active markets. This observable data corresponds primarily to exchange rates and interest rates.
| June 30, 2020 | |||||||
|---|---|---|---|---|---|---|---|
| Maturity | |||||||
| (in millions of euros) | Total | -1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | +5 years |
| Bonds (excl. accrued interest) | Bonds (excl. accrued interest) June 30, 2020 4,028 | - | 699 | - | 496 | 1,346 | 1,487 |
| Medium-term loan (financing of Epsilon acquisition) | Medium-term loan (financing of Epsilon acquisition) June 30, 2020 1,104 | - | 804 | 150 | 150 | - | - |
| Revolving credit facility | Revolving credit facility June 30, 2020 983 | - | - | - | - | 983 | - |
| Debt related to commitments to purchase non-controlling interests acquisitions of shareholdings | Debt related to commitments to purchase non-controlling interests acquisitions of shareholdings June 30, 2020 35 | 27 | 4 | 2 | - | 2 | - |
| Liabilities related to earn-out payments | Liabilities related to earn-out payments June 30, 2020 324 | 181 | 74 | 36 | 32 | 1 | - |
| Other financial liabilities | Other financial liabilities June 30, 2020 53 | 45 | 8 | - | - | - | - |
| Total borrowings and other financial liabilities | Total borrowings and other financial liabilities June 30, 2020 6,527 | 253 | 1,589 | 188 | 678 | 2,332 | 1,487 |
