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Bank Loans and Notes Payables | 12 Months Ended
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Dec. 31, 2021
Disclosure of detailed information about borrowings [abstract] |
Bank Loans and Notes Payables | Bank Loans and Notes Payables
Expressed in millions of mexican pesos. (1) | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 and following years | Carrying value as of December 31, 2021 | Fair value as of December 31, 2021 | Carrying value as of December 31, 2020
Short- term debt:
Fixed rate debt: |  |  |  |  |  |  |  |  |
Argentine pesos |  |  |  |  |  |  |  |  |
Bank loans | 461 | — | — | — | — | — | 461 | 461 | 711
Interest rate | 41.02% | — | — | — | — | — | 41.02% |  | 44.73%
Uruguayan pesos |  |  |  |  |  |  |  |  |
Bank loans | 184 | — | — | — | — | — | 184 | 184 | 498
Interest rate | 6.00% | — | — | — | — | — | 6.00% |  | 15.13%
Subtotal | 645 | — | — | — | — | — | 645 | 645 | 1,209
Variable rate debt: |  |  |  |  |  |  |  |  |
Colombian pesos |  |  |  |  |  |  |  |  |
Bank loans | — | — | — | — | — | — | — | — | 436
Interest rate | — | — | — | — | — | — | — |  | 3.08%
Subtotal | — | — | — | — | — | — | — | — | 436
Short- term debt | 645 | — | — | — | — | — | 645 | 645 | 1,645
Long term debt:
Fixed rate debt: |  |  |  |  |  |  |  |  |
U.S. Dollar |  |  |  |  |  |  |  |  |
Yankee bond | — | — | — | — | — | 52,255 | 52,255 | 56,147 | 50,598
Interest rate | — | — | — | — | — | 3.09% | 3.09% |  | 3.09%
Mexican pesos |  |  |  |  |  |  |  |  |
Senior notes | — | 7,498 | — | — | — | 18,449 | 25,947 | 24,722 | 21,483
Interest rate | — | 5.46% | — | — | — | 7.59% | 6.97% |  | 7.00%
Brazilian reais |  |  |  |  |  |  |  |  |
Bank loans | 48 | 28 | 18 | — | — | — | 94 | 94 | 157
Interest rate | 6.00% | 6.40% | 6.62% | — | — | — | 6.24% |  | 6.18%
Uruguayan pesos |  |  |  |  |  |  |  |  |
Bank loans | 256 | 930 | — | — | — | — | 1,186 | 1,186 | 1,031
Interest rate | 8.04% | 6.27% | — | — | — | — | 6.65% |  | 9.72%
Expressed in millions of mexican pesos. (1) | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 and following years | Carrying value as of December 31, 2021 | Fair value as of December 31, 2021 | Carrying value as of December 31, 2020
Subtotal | 304 | 8,456 | 18 | 0 | — | 70,704 | 79,482 | 82,149 | 73,269
Variable rate debt: |  |  |  |  |  |  |  |  |
Mexican pesos |  |  |  |  |  |  |  |  |
Senior notes | 1,499 | — | — | 1,726 | 2,425 | — | 5,650 | 5,540 | 3,181
Interest rate | 5.49% | — | — | 5.32% | 5.29% | — | 5.35% |  | 4.64%
Bank loans | — | — | — | — | — | — | — | — | 9,335
Interest rate | — | — | — | — | — | — | — |  | 5.04%
Brazilian reais |  |  |  |  |  |  |  |  |
Bank loans | 5 | — | — | — | — | — | 5 | 5 | 48
Interest rate | 8.95% | — | — | — | — | — | 8.95% |  | 8.44%
Subtotal | 1,504 | — | — | 1,726 | 2,425 | — | 5,655 | 5,545 | 12,564
Long term debt | 1,808 | 8,456 | 18 | 1,726 | 2,425 | 70,704 | 85,137 | 87,694 | 85,833
Current portion of long term debt | 1,808 | — | — | — | — | — | 1,808 | 1,805 | 3,372
Long- term debt | — | 8,456 | 18 | 1,726 | 2,425 | 70,704 | 83,329 | 85,889 | 82,461
(1)All interest rates shown in this table are weighted average contractual annual rates. The fair value of bank loans is calculated based on the discounted value of contractual cash flows whereby the discount rate is estimated using rates currently offered for debt of similar amounts and maturities, which is considered to be level 2 in the fair value hierarchy. The fair value of the Company’s publicly traded debt is based on quoted market prices as of December 31, 2021 and 2020, which is considered to be level 1 in the fair value hierarchy. For the years ended December 31, 2021, 2020 and 2019, the interest expense related to the bank loans and notes payable is comprised as follows and included in the consolidated income statement under the interest expense caption:
| 2021 | 2020 | 2019
Interest on debts and borrowings | Ps. 4,544 | Ps. 6,228 | Ps. 4,459
Finance charges for employee benefits | 248 | 231 | 200
Derivative instruments (Interest) | 1,097 | 1,174 | 1,946
Finance charges of leases | 101 | 105 | 129
Finance operating charges | 202 | 156 | 170
| Ps. 6,192 | Ps. 7,894 | Ps. 6,904
The Company has the following debt bonds: a) registered with the Mexican stock exchange: i) Ps. 7,500 (nominal amount) with a maturity date in 2023 and fixed interest rate of 5.46%, ii) Ps. 1,500 (nominal amount) with a maturity date in 2022 and floating interest rate of TIIE + 0.25%, iii) Ps. 8,500 (nominal amount) with a maturity date in 2027 and fixed interest rate of 7.87%, iv) Ps. 1,727 (nominal amount) with a maturity date in 2025 and floating interest rate of TIIE + 0.08%, v) Ps. 3,000 (nominal amount) with a maturity date in 2028 and fixed interest rate of 7.35%, vi) Ps. 6,965 (nominal amount) with a maturity date in 2028 and fixed rate of 7.36%, and vii) Ps. 2,435 (nominal amount) with a maturity date in 2026 and floating rate of TIIE + 0.05%, and b) registered with the SEC : i) Senior notes of US. $ 1,250 with interest at a fixed rate of 2.75% and maturity date on January 22, 2030, ii) Senior notes of US. $ 705 with interest at a fixed rate of 1.85% and maturity date on September 1, 2032 and iii) Senior notes of US. $ 600 with interest at a fixed rate of 5.25% and maturity date on November 26, 2043 all of which are guaranteed by our subsidiaries: Propimex, S. de R.L. de C.V., Comercializadora La Pureza de Bebidas, S. de R.L. de C.V., Controladora Interamericana de Bebidas, S. de R.L. de C.V., Grupo Embotellador Cimsa, S. de R.L. de C.V., Refrescos Victoria del Centro, S. de R.L. de C.V., and Yoli de Acapulco, S. de R.L. de C.V. (“Guarantors”). During 2019, the Company had credit contracts in Mexico for an amount of Ps. 9,400 at an interest rate of 8.39% and 7.91%. Such loans were used to settle bank loans denominated in USD and for general corporate purposes. Additionally, the Company obtained during 2019 bank loans in Uruguay, Colombia and Argentina for an amount of Ps. 1,670. During 2020, the Company obtained (and paid off) bank loans to build liquidity in light of the recent COVID-19 pandemic: in Mexico for an amount of Ps. 15,650 at a weighted interest rate of 6.04%, and in Argentina and Colombia for an amount of Ps. 1,184. Similarly, on January 22, 2020 the Company prepaid senior notes in Mexico for US. $ 900, and on February 18, 2020, the Company paid the total balance of its senior notes for US. $ 500. In addition, the Company celebrated bank loans in Argentine and Uruguayan peso with some banks for Ps. 711 and Ps. 759 (nominal amounts), respectively. On September 2021, the Company issued the first Sustainability-Linked Bond (SLB) in the Mexican Market on a dual-tranche transaction for an amount of Ps. 9,400; such bonds were used to prepay bank loans in Mexico with maturity dates in 2025 and 2026. The bond’s interest rate depends on us achieving key performance indicators, and in the event that such indicators are not met by the dates established in the offering documents, the interest rate on the bonds will increase by 25 basis points. Additionally, during 2021, the Company obtained bank loans in local currency in Argentina and Uruguay for Ps. 461 and Ps. 1,114 (nominal amounts) respectively. 17.1 Reconciliation of liabilities arising from financing activities.
|  | Cash flows |  | Non-cash impact |
| Carrying Value at December 31, 2020 | Repayments | Proceeds |  | New leases | Others | Foreign Exchange movement | Translation Effect | Carrying Value at December 31, 2021
Short-term bank loans | Ps. 1,645 | Ps. (1,925) | Ps. 844 |  | Ps. — | Ps. — | Ps. — | Ps. 81 | Ps. 645
Total short-term from financing activities | Ps. 1,645 | Ps. (1,925) | Ps. 844 |  | Ps. — | Ps. — | Ps. — | Ps. 81 | Ps. 645
Long-term bank loans | 10,568 | (9,764) | 947 |  | — | — | — | (467) | 1,284
Long-term notes payable | 75,265 | (2,500) | 9,400 |  | — | — | 1,688 | — | 83,853
Total long-term from financing activities | Ps. 85,833 | Ps. (12,264) | Ps. 10,347 |  | Ps. — | Ps. — | Ps. 1,688 | Ps. (467) | Ps. 85,137
Lease liabilities | Ps. 1,306 | Ps. (629) | Ps. — |  | Ps. 533 | Ps. 340 | Ps. (3) | Ps. (42) | Ps. 1,505
Total from financing activities | Ps. 88,784 | Ps. (14,818) | Ps. 11,191 |  | Ps. 533 | Ps. 340 | Ps. 1,685 | Ps. (428) | Ps. 87,287
|  | Cash flows |  | Non-cash impact |
| Carrying Value at December 31, 2019 | Repayments | Proceeds |  | New leases | Others | Foreign Exchange movement | Translation Effect | Carrying Value at December 31, 2020
Short-term bank loans | Ps. 882 | Ps. (17,641) | Ps. 18,525 |  | Ps. — | Ps. — | Ps. — | Ps. (121) | Ps. 1,645
Short-term notes payable | — | — | — |  | — | — | — | — | —
Total short-term from financing activities | Ps. 882 | Ps. (17,641) | Ps. 18,525 |  | Ps. — | Ps. — | Ps. — | Ps. (121) | Ps. 1,645
Long-term bank loans | 11,576 | (896) | 293 |  | — | — | — | (405) | 10,568
Long-term notes payable | 57,519 | (26,650) | 43,479 |  | — | — | 1,018 | (101) | 75,265
Long-term lease liabilities | — | — | — |  | — | — | — | — | —
Total long-term from financing activities | Ps. 69,095 | Ps. (27,546) | Ps. 43,772 |  | Ps. — | Ps. — | Ps. 1,018 | Ps. (506) | Ps. 85,833
Lease liabilities (1) | Ps. 1,383 | Ps. (573) | Ps. — |  | Ps. 599 | Ps. 33 | Ps. (13) | Ps. (123) | Ps. 1,306
Total from financing activities | Ps. 71,360 | Ps. (45,760) | Ps. 62,297 |  | Ps. 599 | Ps. 33 | Ps. 1,005 | Ps. (750) | Ps. 88,784
(1) Beginning balance as of adoption date; January 1st, 2019

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