Adecco Group –
Notes to consolidated financial statements (unaudited)
in millions, except share and per share information

Note 2 • Financing arrangements

The Company’s long-term and short-term debt as of June 30, 2011, amounted to EUR 1,571 compared to EUR 1,305 as of December 31, 2010. Short-term debt as of June 30, 2011 amounted to EUR 311 and consisted of bank overdrafts and borrowings under the commercial paper programme and under lines of credit, including EUR 50 drawn under the existing EUR 550 five-year committed multicurrency revolving credit facility maturing in 2013. Short-term debt as of December 31, 2010 amounted to EUR 168.

Long-term debt

The Company’s long-term debt as of June 30, 2011 and December 31, 2010 consist of the following:

in EUR

Principal at maturity

Maturity

Fixed
interest rate

30.06.2011

31.12.2010

 

 

 

 

 

 

7-year guaranteed Euro medium-term notes

EUR 500

2018

4.75%

488

 

5-year guaranteed Euro medium-term notes

EUR 356

2014

7.625%

356

500

Fixed rate guaranteed notes

EUR 333

2013

4.5%

339

516

Medium-term loan, payable back in instalments by 2012

 

 

 

75

119

Other

 

 

 

2

2

 

 

 

 

1,260

1,137

Less current maturities

 

 

 

(51)

(49)

Long-term debt, less current maturities

 

 

 

1,209

1,088

Exchange and tender offers for outstanding notes and issuance of new 7-year notes

In April 2011, Adecco International Financial Services BV, a wholly-owned subsidiary of the Company, completed tender and exchange offers for the outstanding EUR 500 5-year guaranteed Euro medium-term notes due 2014 (“5-year notes”) and EUR 500 fixed rate guaranteed notes due 2013 (“fixed rate notes”), collectively “old notes” and issued new EUR 500 7-year unsubordinated fixed rate notes guaranteed by Adecco S.A., due April 2018 (“7-year notes”). The purpose of the transaction was to lengthen the Company’s debt maturity profile and to take advantage of favourable market conditions.

EUR 84 nominal value of outstanding fixed rate notes were exchanged for the 7-year notes and EUR 83 nominal value of outstanding fixed rate notes were tendered for cash. This transaction reduces the nominal value of the outstanding principal of the fixed rate notes to EUR 333.

EUR 71 nominal value of outstanding 5-year notes were exchanged for the 7-year notes and EUR 73 nominal value of outstanding 5-year notes were tendered for cash. This transaction reduces the nominal value of the outstanding principal of the 5-year notes to EUR 356.

The 7-year notes were issued within the framework of the Euro Medium-Term Note Programme and trade on the London Stock Exchange. The notes were issued at a price of 99.453%.

The interest on the 7-year notes is paid annually in arrears at a fixed annual rate of 4.75%.

The exchange and tender were priced at 103.06% for the fixed rate notes and at 111.53% for the 5-year notes. In relation to the tender of the old notes, the Company recognised a loss of EUR 11, included in other income/(expenses), net. In addition, a loss of EUR 10 relating to the exchange transaction is deferred and will be amortised to interest expense over the life of the 7-year notes.