[26] Financial liabilities Audited

Credit facilities granted to the Merck Group are as follows:

In fiscal 2007, a € 2 billion multi-currency term loan and revolving credit facility was agreed. The loan has a term of seven years and was placed with an international banking syndicate.

The current and non-current liabilities of the Merck Group to banks are denominated in the following currencies:

In 2005, Merck KGaA launched its first euro benchmark bond in the European debt capital market via Merck Finanz AG, Luxembourg. The size of the issue was € 500 million with a maturity of seven years. The bond pays a coupon of 3.75% and was issued at a price of 99.716%. The interest expense of the bond has been fixed to the six-month Euribor rate through interest rate swaps. Since the hedging instruments are based on the same fundamentals that determine the value of the underlying transaction, changes in the market interest rates lead to opposite changes in the value of the bond. The measurement of the bond reflects fair value taking into account disagios and transaction costs. The costs of issuing the bond are reflected in the book value and are distributed evenly over the term of the bond.

In 2007, Merck KGaA launched another euro benchmark bond for € 500 million in the European debt capital market. It has a term of three years. The bond pays a coupon of 4.75% and was issued at a price of 99.7%. The measurement reflects amortized cost. In order to meet short-term capital requirements, Merck KGaA issued a commercial paper program with a volume of € 2 billion, which had not been utilized as of the reporting date. Liabilities from financial leasing represent the discounted amount of future payments arising from finance leases. This item primarily relates to liabilities from finance leases for buildings. Information on liabilities due to related parties can be found in Note [48].