[30] Financial liabilities

As at December 31, 2021, non-current and current financial liabilities essentially comprised promissory notes, the issued corporate bond, and liabilities to banks. Financial liabilities as at the reporting date break down as follows:

Promissory notes

As at December 31, 2021, the total nominal amount of the issued promissory notes was €417.0 million (December 31, 2020: €584.0 million). The promissory notes maturing in 2022, 2024, 2025, 2026, and 2027 have fixed and variable interest rates (Euribor + margin). A variable-rate tranche of the promissory note that was due to mature in 2024 and had a nominal amount of €167.0 million was repaid ahead of schedule in April 2021. The following table shows the nominal amounts of the promissory notes issued by KION GROUP AG:

KION GROUP AG has entered into an interest-rate swap in order to hedge the fair value risk resulting from a fixed-rate tranche. The interest-rate swap is recognized as a fair value hedge in accordance with IFRS 9 (see note [42]).

The promissory notes are not collateralized.

Corporate bond

In 2020, KION GROUP AG launched a corporate bond program (EMTN program) with a total volume of €3 billion. The first bond was placed on the capital markets under this program in 2020 and had a nominal amount of €500.0 million, a maturity date in 2025, and a coupon of 1.625 percent. The bond is not collateralized.

Liabilities to banks

As at December 31, 2021, as had also been the case a year earlier, liabilities to banks related to drawdowns of credit lines and to Group companies’ loans from local banks.

Since October 4, 2021, KION GROUP AG has had a new syndicated revolving credit facility (RCF) with a total volume of €1,000.0 million. Its term ends in October 2026 and can be extended by up to two years with the consent of the syndicate of banks. The new facility has a variable interest rate; the contractually agreed interest terms are linked to KION GROUP AG’s credit rating and to compliance with sustainability KPIs. The previous credit facility, whose term was due to end in February 2023 and which had a volume of €1,150.0 million, was terminated.

Transaction costs of €3.8 million were incurred in connection with the new revolving credit facility and will be recognized in profit or loss over the term of the credit facility. No amount was drawn down from the revolving credit facility as at December 31, 2021, as had also been the case a year earlier.

The liabilities to banks are not collateralized. As a rule, KION GROUP AG issues guarantees to the banks for Group companies’ existing payment obligations.

Other financial liabilities

In November 2019, KION GROUP AG launched a commercial paper program with a maximum program volume of €500.0 million. No commercial paper had been issued as at December 31, 2021, as had also been the case as at December 31, 2020.

Covenants

The revolving credit facility and a number of promissory notes taken out by KION GROUP AG stipulate adherence to covenants. The agreed financial covenant involves ongoing testing of adherence to a defined maximum level of leverage. This calculation is currently suspended in respect of the new revolving credit facility entered into in October 2021 because KION GROUP AG has had two investment-grade credit ratings since August 2021.

Less favorable interest terms may be imposed if the level of leverage is increased significantly. Exceeding the maximum level of leverage as at a particular reference date may give lenders a right of termination.