Borrowings

 
2016
2015
 
Total
Of which
current
Total
Of which
current
     
Debenture loans
3,290
749
2,541
-
Private loans
44
37
38
22
Finance lease liabilities
4
-
-
-
Credit institutions / commercial paper
67
67
231
231
     
Total
3,405
853
2,810
253

In agreements governing loans with a residual amount at year-end 2016 of €3,290 million, of which €749 million is of a short-term nature (31 December 2015: €2,541 million, none of which of a short-term nature), negative pledge clauses have been included that restrict the provision of security.

The documentation of the €750 million bond issued in October 2007, the €300 million bond issued in November 2013, the €500 million bond issued in March 2014, the €500 million bond issued in April 2015, the €500 million bond issued in September 2015 and the €750 million bond issued in September 2016 include a change-of-control clause. This clause allows the bond investors to request repayment at par if 50% or more of the DSM shares are controlled by a third party and if the company is downgraded below investment grade (< BBB-). In December 2016, Moody's left the negative outlook for their A3 credit rating for DSM unchanged. Standard & Poor's confirmed DSM's credit rating in March 2016 to be A- with a stable outlook.

At 31 December 2016, there was €2,245 million in borrowings outstanding with a remaining term of more than five years (at 31 December 2015, there was €1,493 million with a remaining term of more than five years).

The schedule of repayment of borrowings is as follows:

Borrowings by maturity

 
2016
2015
   
2016
-
253
2017
853
760
2018
6
4
2019
300
300
2020 and 2021
1
-
After 2021
2,245
1,493
   
Total
3,405
2,810

A breakdown of the borrowings by currency is given in the following table:

Borrowings by currency

 
2016
2015
   
EUR
3,291
2,693
USD
38
37
CNY
5
20
TWD
50
47
Other
21
13
   
Total
3,405
2,810

On balance, total borrowings increased by €595 million owing to the following changes:

Movements of borrowings

 
2016
2015
   
Balance at 1 January
2,810
2,780
   
Loans taken up
754
1,008
Repayments
(4)
(653)
Acquisitions/disposals
8
(121)
Changes in debt to credit institutions/commercial paper
(161)
(232)
Exchange differences
(2)
28
   
Balance at 31 December
3,405
2,810

The average effective interest rate on the portfolio of borrowings outstanding in 2016, including hedge instruments related to these borrowings, amounted to 3.40% (2015: 3.63%).

A breakdown of debenture loans is given below:

Debenture loans

 
Nom. amt.
2016
2015
      
EUR loan
5.25%
2007-2017
750
749
748
EUR loan
1.75%
2013-2019
300
300
300
EUR loan
2.38%
2014-2024
500
498
497
EUR loan
1.00%
2015-2025
500
497
497
EUR loan
1.38%
2015-2022
500
499
499
EUR loan
0.75%
2016-2026
750
747
-
      
Total
  
3,300
3,290
2,541

All debenture loans have a fixed interest rate.

At the end of 2016, an amount of €300 million (year-end 2015: €300 million) of the 5.25% EUR loan 2007-2017 was swapped into CHF to hedge the currency risk of net investments in CHF-denominated subsidiaries. In 2006 and 2007, the loan had been partly pre-hedged (cash flow hedge) by means of forward starting swaps, leading to a lower effective fixed interest rate of 4.89% for the full loan.

The 1.75% EUR bond 2013-2019 of €300 million has an effective interest rate of 1.76%. The 2.375% EUR bond 2014-2024 of €500 million was pre-hedged by means of forward starting swaps, resulting in an effective interest rate for this bond at 3.97% including settlement of pre-hedge. The 1.375% EUR bond 2015-2022 of €500 million has an effective interest rate of 1.40%.

The 1% EUR bond 2015-2025 of €500 million was pre-hedged by means of forward starting swaps, resulting in an effective interest rate for this bond at 3.65% including settlement of pre-hedge. In September 2016, a new 0.75% EUR bond of €750 million was issued for a tenor of 10 years.

In August 2015, pre-hedge contracts were concluded for an intended refinancing in 2017 of the 5.25% EUR loan 2007-2017 by means of a collar on 10-year interest with a floor of 1% and capped at 1.97%, both excluding DSM spread. At the issue of the new bond this pre-hedge was settled. The effective interest rate of the new bond amounts 1.08% including settlement of pre-hedge. The time value at moment of settlement of the collar amounted €4 million negative (year-end 2015: €1 million negative), resulting in a charge for 2016 of €3 million reported in Financial income and expense.

A breakdown of private loans is given below:

Private loans

 
2016
2015
     
TWD loan
floating
(1 month)
2013-2018
34
31
Other loans
10
7
     
Total
  
44
38

DSM’s policy regarding financial-risk management is described in Note 23.