Financial and debt policy

Debt evolution 2006/2007

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The acquisition of Allied Domecq brought the Group’s financial debt to €9.9 billion. 

At end of June 2007, financial net debt is €6.515 billion

This debt reduction of 3.4 billion euros in 2 years is the result of:

• generation of Free Cash Flow from the operations
• conversion of an Oceane (convertible bond)
• and realisation of  a disposal programme (Dunkin brands in the United States, stake in Britvic, Bushmills and Glen Grant...)

Bond issue

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On 23 November 2006, Pernod Ricard launched its inaugural dual tranche bond issue worth €850 million:

Tranche 1	Tranche 2
Amount: €300 million Maturity: 4.5 years Final Maturity: 6 June 2011 Settlement: 6 December 2006 Format: Floating rate Coupon: Euribor 3 months + 50 bp Reoffer price: 99.876 Reoffer spread: 53 bp over 3 month-Euribor	Amount: €550 million Maturity: 7 years Final Maturity: 6 December 2013 Settlement: 6 December 2006 Format: Fixed rate notes Coupon: 4.625 % Reoffer price: 99.526 Reoffer spread: 80bp over the 7 year fixed swap rate

This transaction was planned at the time of financing the Allied Domecq acquisition and is aimed at refinancing part of the credit facility put in place in August 2005. It allows the Group to diversify its financing sources.

Pernod Ricard has appointed HSBC, IXIS-CIB, Natixis, Royal Bank of Scotland and Société Générale CIB as Joint Bookrunners to lead and place this inaugural issue.