Borrowings and Debentures

12 Months Ended

Dec. 31, 2018

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Borrowings and Debentures

17. Borrowings and Debentures

(1) Short-term borrowings as of December 31, 2018 and 2017 are as follows:

(In millions of won)
	Lender		Annual interest rate (%)		December 31, 2018		December 31, 2017
Short-term borrowings		Shinhan Bank		3.19	￦	30,000		30,000
		Shinhan Bank		2.27		30,000		—
		Shinhan Bank		3.75		15,000		—
		KEB Hana Bank		3.95		5,000		—
Commercial paper		KEB Hana Bank		1.67		—		50,000
Bank overdraft		KEB Hana Bank		3.17		—		30,000
		Shinhan Bank		3.38		—		20,000
					￦	80,000		130,000

(2) Long-term borrowings as of December 31, 2018 and 2017 are as follows:

(In millions of won and thousands of U.S. dollars)
Lender	Annual interest rate (%)		Maturity		December 31, 2018			December 31, 2017
Korea Development Bank(*1)		3.20		Mar. 31, 2020	￦	—			30,000
KEB Hana Bank		3.51		Feb. 28, 2019		40,000			40,000
Kookmin Bank		1.95		Mar. 15, 2018		—			717
Korea Development Bank(*2)		2.20		Jul. 30, 2019		9,750			22,750
Korea Development Bank(*2)		2.20		Jul. 30, 2019		2,500			5,833
Korea Development Bank(*2)		2.32		Dec. 20, 2021		36,750			49,000
Korea Development Bank(*2)		2.78		Dec. 21, 2022		50,000			50,000
Credit Agricole CIB		2.72		Dec. 14, 2023		50,000			—
Export Kreditnamnden(*3)		1.70		Apr. 29, 2022		45,007 (USD 40,253	)		55,471 (USD 51,775	)
Shinhan Bank and others		4.21		Sept. 30, 2023		1,750,000			—
Shinhan Bank and others		7.20		Sept. 30, 2023		150,000			—
Sub-total						2,134,007			253,771
Less present value discount						(29,011	)		(954	)
						2,104,996			252,817
Less current installments						(89,631	)		(41,331	)
					￦	2,015,365			211,486

(*1) SK Planet Co., Ltd., one of the subsidiaries of the Parent Company entered into a floating-to-fixed interest rate swap agreement to hedge the interest rate risk.

(*2) SK Broadband Co., Ltd., one of the subsidiaries of the Parent Company entered into a floating-to-fixed interest rate swap agreement to hedge the interest rate risk.

(*3) The long-term borrowings are to be repaid by installments on an annual basis until 2022.

(3) Debentures as of December 31, 2018 and 2017 are as follows:

(In millions of won and thousands of U.S. dollars)
	Purpose	Maturity		Annual interest rate (%)		December 31, 2018			December 31, 2017
Unsecured corporate bonds	Other fund		2018		5.00	￦	—			200,000
Unsecured corporate bonds	Operating fund		2021		4.22		190,000			190,000
Unsecured corporate bonds	Operating and refinancing fund		2019		3.24		170,000			170,000
Unsecured corporate bonds			2022		3.30		140,000			140,000
Unsecured corporate bonds			2032		3.45		90,000			90,000
Unsecured corporate bonds	Operating fund		2023		3.03		230,000			230,000
Unsecured corporate bonds			2033		3.22		130,000			130,000
Unsecured corporate bonds			2019		3.30		50,000			50,000
Unsecured corporate bonds			2024		3.64		150,000			150,000
Unsecured corporate bonds(*1)			2029		4.72		61,813			60,278
Unsecured corporate bonds	Refinancing fund		2019		2.53		160,000			160,000
Unsecured corporate bonds			2021		2.66		150,000			150,000
Unsecured corporate bonds			2024		2.82		190,000			190,000
Unsecured corporate bonds	Operating and refinancing fund		2022		2.40		100,000			100,000
Unsecured corporate bonds			2025		2.49		150,000			150,000
Unsecured corporate bonds			2030		2.61		50,000			50,000
Unsecured corporate bonds	Operating fund		2018		1.89		—			90,000
Unsecured corporate bonds			2025		2.66		70,000			70,000
Unsecured corporate bonds			2030		2.82		90,000			90,000
Unsecured corporate bonds	Operating and refinancing fund		2018		2.07		—			80,000
Unsecured corporate bonds			2025		2.55		100,000			100,000
Unsecured corporate bonds			2035		2.75		70,000			70,000
Unsecured corporate bonds	Operating fund		2019		1.65		70,000			70,000
Unsecured corporate bonds			2021		1.80		100,000			100,000
Unsecured corporate bonds			2026		2.08		90,000			90,000
Unsecured corporate bonds			2036		2.24		80,000			80,000
Unsecured corporate bonds			2019		1.62		50,000			50,000
Unsecured corporate bonds			2021		1.71		50,000			50,000
Unsecured corporate bonds			2026		1.97		120,000			120,000
Unsecured corporate bonds			2031		2.17		50,000			50,000
Unsecured corporate bonds	Refinancing fund		2020		1.93		60,000			60,000
Unsecured corporate bonds			2022		2.17		120,000			120,000
Unsecured corporate bonds			2027		2.55		100,000			100,000
Unsecured corporate bonds	Operating and refinancing fund		2032		2.65		90,000			90,000
Unsecured corporate bonds	Refinancing fund		2020		2.39		100,000			100,000
Unsecured corporate bonds	Operating and refinancing fund		2022		2.63		80,000			80,000
Unsecured corporate bonds	Refinancing fund		2027		2.84		100,000			100,000
Unsecured corporate bonds			2021		2.57		110,000			—
Unsecured corporate bonds			2023		2.81		100,000			—
Unsecured corporate bonds			2028		3.00		200,000			—
Unsecured corporate bonds			2038		3.02		90,000			—
Unsecured corporate bonds	Operating and refinancing fund		2021		2.10		100,000			—
Unsecured corporate bonds			2023		2.33		150,000			—
Unsecured corporate bonds			2038		2.44		50,000			—
Unsecured corporate bonds(*2)	Operating fund		2019		3.49		210,000			210,000
Unsecured corporate bonds(*2)			2019		2.76		130,000			130,000
Unsecured corporate bonds(*2)			2018		2.23		—			50,000
Unsecured corporate bonds(*2)			2020		2.49		160,000			160,000
Unsecured corporate bonds(*2)			2020		2.43		140,000			140,000
Unsecured corporate bonds(*2)			2020		2.18		130,000			130,000
Unsecured corporate bonds(*2)			2019		1.58		50,000			50,000
Unsecured corporate bonds(*2)	Operating and refinancing fund		2021		1.77		120,000			120,000
Unsecured corporate bonds(*2)	Operating fund		2022		2.26		150,000			150,000
Unsecured corporate bonds(*2)	Refinance fund		2022		2.34		30,000			30,000
Unsecured corporate bonds(*2)	Operating and refinancing fund		2022		2.70		140,000			140,000
Unsecured corporate bonds(*2)			2021		2.59		70,000			—
Unsecured corporate bonds(*2)			2023		2.93		80,000			—
Convertible bonds(*3)	Operating fund		2019		1.00		5,479			5,558
Unsecured global bonds	Operating fund		2027		6.63		447,240 (USD 400,000	)		428,560 (USD 400,000	)
Unsecured global bonds			2018		2.13		—			749,980 (USD 700,000	)
Unsecured global bonds			2023		3.75		559,050 (USD 500,000	)		—
Unsecured global bonds(*2)	Refinancing fund		2023		3.88		335,430 (USD 300,000	)		—
Unsecured global bonds(*2)	Operating fund		2018		2.88		—			321,420 (USD 300,000	)
Floating rate notes(*4)	Operating fund		2020		3M LIBOR + 0.88		335,430 (USD 300,000	)		321,420 (USD 300,000	)
Sub-total							7,494,442			7,107,216
Less discounts on bonds							(27,590	)		(21,029	)
							7,466,852			7,086,187
Less current installments of bonds							(894,641	)		(1,489,617	)
						￦	6,572,211			5,596,570

(*1) The Group eliminated a measurement inconsistency of accounting profit or loss between the bonds and related derivatives by designating the structured bonds as financial liabilities at fair value through profit or loss. The carrying amount of financial liabilities designated at fair value through profit or loss exceeds the principal amount required to pay at maturity by ￦11,813 million as of December 31, 2018.

(*2) Unsecured corporate bonds were issued by SK Broadband Co., Ltd.

(*3) Convertible bonds were issued by IRIVER LIMITED.

(*4) As of December 31, 2018, 3M LIBOR rate is 2.80%.