Send us Feedback

LG Display (LPL)
Analysis
SUMMARY
BULLS
BEARS
TOPICS
Data
DATA CENTRAL
STOCK CHART
Financials
SEC FILINGS
BALANCE
INCOME
CASH FLOW

LPL » Topics » Interest Rate Risks

This excerpt taken from the LPL 20-F filed Apr 11, 2005.

Interest Rate Risks

 

Our exposure to interest rate risks relates primarily to our long-term debt obligations, which are typically incurred to fund capital expenditures, as well as for working capital and other general corporate purposes. As of December 31, 2004, we had outstanding long-term debt, including current portion, in the amount of (Won)2,206.1 billion (US$2.131.3 million). We have entered into derivative transactions with regard to interest rates for our existing U.S. dollar-denominated floating rate notes. We may enter into similar arrangements in the future to manage our exposure to changes in interest rates.

 

We may be exposed to interest rate risks on additional debt financing that we may periodically undertake to fund capital expenditures required for our capacity expansion. Upward fluctuations in interest rates increase the cost of new debt. The interest rate that we will be able to obtain in a new debt financing will depend on market conditions at that time and may differ from the rates we have secured on our current debt.

 

96

Table of Contents

As of December 31, 2004, we had (Won)585.1 billion (US$565.0 million) aggregate principal amount of U.S. dollar-denominated senior floating rate notes and (Won)164.7 billion (US$159.0 million) aggregate principal amount of U.S. dollar-denominated long-term loans outstanding. The interest rate on these notes and loans is set based on three-month LIBOR plus 0.6 to 1.0% and six-month LIBOR plus 1.2%, respectively. Interest rate adjustments are also made based on our debt-to-equity ratio. The table below provides information about our financial instruments that are sensitive to changes in interest rates. The risk associated with fluctuating interest expense is limited to our U.S. dollar-denominated senior floating rate notes and U.S. dollar-denominated term loans, and we do not believe that a near-term 10% change in the effective interest rate would have a significant impact on our cash flows. We currently do not have any capital lease obligations.

 

     Expected Maturity Dates
   

Fair Value at

December 31, 2004

   2005
     2006
     2007
    

2008 and

thereafter

     Total
   
     (in billions of Won, except interest rate)

Long-term debt obligations

                                              

Fixed rate ((Won))

      —       (Won) 225.7     (Won) 329.4     (Won) 883.0     (Won) 1,438.1    (Won) 1,458.5

Average interest rate

              6.0 %     5.1 %     4.6 %             

Fixed rate (RMB)

      —         —         —       (Won) 18.2     (Won) 18.2    (Won) 18.5

Average interest rate

                              5.2 %             

Variable rate (US$)

    (Won) 213.0     (Won) 218.9     (Won) 231.3     (Won) 86.6     (Won) 749.8    (Won) 714.8

Average interest rate

      3.2 %     3.2 %     2.9 %     3.4 %             

 

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki