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Financial Liabilities | 12 Months Ended
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Dec. 31, 2022
Financial Instruments [Abstract] |
Financial Liabilities | Financial liabilities The breakdown of financial liabilities at December 31, 2022 and the corresponding maturities schedule is as follows:
Millions of euros
| Current | Non-current |  |
Maturity | 2023 | 2024 | 2025 | 2026 | 2027 | Subsequent years | Non-current total | Total
Debentures and bonds | 1,948 |  | 1,130 |  | 3,126 |  | 2,098 |  | 4,170 |  | 18,796 |  | 29,320 |  | 31,268 |
Promissory notes & commercial paper | 544 |  | 127 |  | 54 |  | 12 |  | 3 |  | 159 |  | 355 |  | 899 |
Total Issues | 2,492 |  | 1,257 |  | 3,180 |  | 2,110 |  | 4,173 |  | 18,955 |  | 29,675 |  | 32,167 |
Loans and other payables | 1,184 |  | 673 |  | 572 |  | 202 |  | 376 |  | 1,537 |  | 3,360 |  | 4,544 |
Derivative instruments (Note 19) | 344 |  | 80 |  | 65 |  | 109 |  | 520 |  | 1,250 |  | 2,024 |  | 2,368 |
Total | 4,020 |  | 2,010 |  | 3,817 |  | 2,421 |  | 5,069 |  | 21,742 |  | 35,059 |  | 39,079 |
The estimate of future payments for interest on these financial liabilities at December 31, 2022 is as follows: 1,254 million euros in 2023, 1,147 million euros in 2024, 1,057 million euros in 2025, 978 million euros in 2026, 871 million euros in 2027 and 7,840 million euros in years after 2027. For floating rate financing, the Group mainly estimates future interest using the forward curve of the various currencies at December 31, 2022. Derivative instruments in the table above include the fair value of derivatives classified as financial liabilities, i.e. when they have a negative mark-to-market, yet excluding the fair value of derivatives classified as current financial assets (712 million euros, see Note 15) and non-current financial assets (2,668 million euros, see Note 12). In 2021 and 2022, the Group entered into agreements to extend payment terms with various suppliers, and with factoring companies when such payments are discounted. When the new extended payment terms exceed customary payment terms in the industry, trade liabilities are reclassified to other financial liabilities and the deferred payments made are recognized in net cash flows used in financing activities (see Note 28). At December 31, 2022, there was no outstanding balance pending payment. At December 31, 2021 the corresponding amount pending payment recognized in "Loans and other payables" line was 36 million euros. The deferred payments made in relation to this item during the year amounted to 41 million euros (108 million euros in 2021). The composition of the financial liabilities by category at December 31, 2022 and 2021 is as follows:
December 31, 2022
| Fair value through profit or loss |  | Measurement hierarchy |  |  |
Millions of euros | Held for trading | Fair value option | Hedges | Level 1 (Quoted prices) | Level 2 (Other directly observable market inputs) | Level 3 (Inputs not based on observable market data) | Liabilities at amortized cost | Total carrying amount | Total fair value
Issues | — |  | — |  | — |  | — |  | — |  | — |  | 32,167 |  | 32,167 |  | 29,314 |
Loans and other payables | — |  | — |  | — |  | — |  | — |  | — |  | 4,544 |  | 4,544 |  | 4,514 |
Derivative instruments | 973 |  | — |  | 1,395 |  | — |  | 2,368 |  | — |  | — |  | 2,368 |  | 2,368 |
Total financial liabilities | 973 |  | — |  | 1,395 |  | — |  | 2,368 |  | — |  | 36,711 |  | 39,079 |  | 36,196 |
December 31, 2021
| Fair value through profit or loss |  | Measurement hierarchy |  |  |
Millions of euros | Held for trading | Fair value option | Hedges | Level 1 (Quoted prices) | Level 2 (Other directly observable market inputs) | Level 3 (Inputs not based on observable market data) | Liabilities at amortized cost | Total carrying amount | Total fair value
Issues | — |  | — |  | — |  | — |  | — |  | — |  | 35,408 |  | 35,408 |  | 39,412 |
Loans and other payables | — |  | — |  | — |  | — |  | — |  | — |  | 4,693 |  | 4,693 |  | 4,656 |
Derivative instruments | 524 |  | — |  | 1,670 |  | 6 |  | 2,188 |  | — |  | — |  | 2,194 |  | 2,194 |
Total financial liabilities | 524 |  | — |  | 1,670 |  | 6 |  | 2,188 |  | — |  | 40,101 |  | 42,295 |  | 46,262 |
The calculation of the fair values of the Telefónica Group’s debt instruments required an estimate of the credit spread curve for each currency and corresponding subsidiary using the prices of the Group’s bonds and credit derivatives. At December 31, 2022, some of the financing arranged by Telefónica Group companies in Latin America (Peru), which amounted to approximately 1% of the Telefónica Group’s gross debt, was subject to compliance with certain financial covenants. To date, these covenants are being met and have no impact on the debt of the Telefónica Group companies. Due to the absence of cross-defaults, breach of the covenants would not affect the debt at Telefónica, S.A. level. Some of the financial liabilities of Telefónica Group includes adjustments in the amortized cost at December 31, 2022 and 2021 as a result of fair value interest rate and exchange rate hedges. Issues, promissory notes, commercial paper, loans and other payables The movement in issues, promissory notes, commercial paper, loans and other payables in 2022 and 2021 arising from financial activities is as follows:
| Cash used in financing activities |  |  |  |
Millions of euros | Balance at 12/31/2021 | Cash received | Cash paid | Translation differences and exchange gains and losses | Financial updates | Other movements | Balance at 12/31/2022
Issues | 33,920 |  | 1,746 |  | (3,541) |  | 724 |  | (1,623) |  | 42 |  | 31,268 |
Promissory notes and commercial paper | 1,488 |  | 7 |  | (600) |  | 4 |  | — |  | — |  | 899 |
Loans and other payables | 4,693 |  | 742 |  | (1,802) |  | 55 |  | (38) |  | 894 |  | 4,544 |
| Cash used in financing activities |  |  |  |
Millions of euros | Balance at 12/31/2020 | Cash received | Cash paid | Translation differences and exchange gains and losses | Financial updates | Other movements | Balance at 12/31/2021
Issues | 38,749 |  | 561 |  | (5,847) |  | 889 |  | (444) |  | 12 |  | 33,920 |
Promissory notes and commercial paper | 2,273 |  | 53 |  | (1,042) |  | 5 |  | — |  | 199 |  | 1,488 |
Loans and other payables | 4,535 |  | 3,120 |  | (3,178) |  | (32) |  | 80 |  | 168 |  | 4,693 |
Debentures and bonds Financial updates of debenture and bond issues include mainly the value adjustment of the basis adjustment bonds due to their fair value hedges, impacted by interest rate hikes. At December 31, 2022, the nominal amount of outstan ding debentures and bonds issues was 31,095 million euros (32,156 million euros at December 31, 2021). Appendix III presents the characteristics of all outstanding debentures and bond issues at the year-end 2022, and the significant issues made during the year. Telefónica, S.A. has a full and unconditional guarantee on issues made by Telefónica Emisiones, S.A.U., and Telefónica Europe, B.V., both of which are wholly owned finance subsidiaries of Telefónica, S.A. No other subsidiaries of Telefónica, S.A. provide guarantees on these issues. Promissory notes and commercial paper The main programs for issuance of promissory notes and commercial paper are the following: •At December 31, 2022, Telefónica Europe, B.V. had a commercial paper issuance program guaranteed by Telefónica, S.A. for up to 5,000 million euros. The outstanding balance of commercial paper issued under this program at December 31, 2022 was 500 million euros, issued at an average interest rate of 0.28% for 2022 (999 million euros issued in 2021 at an average rate of -0.46%). •At December 31, 2022, Telefónica, S.A. had a corporate promissory note program for 500 million euros expandable to 2,000 million euros, with no outstanding balance at December 31, 2022 (30 million euros at December 31, 2021). Interest-bearing debt Other movements in "Loans and other payables" at December 31, 2022 include collections and payments related to collateral liabilities deposit associated with Telefónica, S.A. debt for a net amount of 580 million euros (309 million euros at December 31, 2021). The average interest rate on outstanding loans and other payables at December 31, 2022 was 3.45% (1.30% in 2021). This percentage does not include the impact of hedges arranged by the Group. The main financing transactions included under “Interest-bearing debt” line outstanding at December 31, 2022 and 2021 and their nominal amounts are provided in Appendix V. Interest-bearing debt arranged or repaid in 2022 mainly includes the following:
Description | Limit 12/31/2022 (million euros) | Currency | Outstanding balance 12/31/2022 (million euros) | Arrangement date | Maturity date | Drawndown 2022 (million euros) | Repayment 2022 (million euros)
Telefónica, S.A. |  |  |  |  |  |  |
Bilateral loan | — |  | EUR | 150 |  | 09/26/2022 | 12/15/2032 | 150 |  | — |
Sustainable syndicated (1) | 5,500 |  | EUR | — |  | 03/15/2018 | 01/13/2027 | — |  | — |
Bilateral loan | 125 |  | EUR | — |  | 12/23/2022 | 06/23/2033 | — |  | — |
Colombia Telecomunicaciones S.A. E.S.P. |  |  |  |  |  |  |
Bilateral loan (2) | — |  | USD | — |  | 03/24/2020 | 01/26/2022 | — |  | 117 |
Telefónica Brasil, S.A. |  |  |  |  |  |  |
Bilateral loan | — |  | USD | 199 |  | 04/04/2022 | 09/28/2023 | 199 |  | — |
Bluevia Fibra S.L.U. |  |  |  |  |  |  |
Syndicated | 360 |  | EUR | 245 |  | 11/16/2022 | 12/20/2027 | 245 |  | — |
Telxius Telecom, S.A. |  |  |  |  |  |  |
Syndicated | 300 |  | EUR | 201 |  | 12/01/2017 | 12/01/2024 | 100 |  | 70 |
(1) On January 13, 2022 there was maturity extension of the sustainability-linked syndicated loan facility for 5,500 million euros. The loan has two annual extension options at Telefónica, S.A. request with a maturity maximum up to 2029 (see Note 29.d). (2) On January 26, 2022 there was an early repayment for 132 million dollars of the bilateral loan originally scheduled to mature in 2023. At December 31, 2022, the Telefónica Group presented availabilities of financing from different sources that amounted to approximately 11,737 million euros (12,182 million euros at December 31, 2021), of which 11,434 million euros will mature in more than twelve months. Within these availabilities of financing, 10,114 million euros are included, whose interests are linked to the fulfillment of sustainability objectives. Of these, 3,864 million euros correspond to committed lines and bilateral financing, 750 million euros correspond to the sustainable syndicated loan of Telefónica Germany GmbH & Co. OHG (see Annex V) and 5,500 million euros correspond to the sustainable syndicated loan of Telefónica, S.A. (see Note 29.d). Loans by currency The breakdown of “Loans and other payables” line by currency at December 31, 2022 and 2021, and the equivalent value of foreign-currency loans in euros, is as follows:
| Outstanding balance (in millions)
| Local Currency | Euros
Currency | 12/31/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021
Euro | 2,823 |  | 3,148 |  | 2,823 |  | 3,148 |
U.S. dollar | 514 |  | 885 |  | 481 |  | 781 |
Brazilian real | 1,688 |  | 225 |  | 303 |  | 36 |
Colombian peso | 1,402,435 |  | 1,399,759 |  | 273 |  | 310 |
Mexican peso | 4,501 |  | 64 |  | 217 |  | 3 |
Uruguayan peso | 5,456 |  | 5,456 |  | 128 |  | 108 |
Chilean Peso | 181,601 |  | 177,845 |  | 199 |  | 186 |
Other currencies |  |  | 120 |  | 121 |
Total Group |  |  | 4,544 |  | 4,693 |

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