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Bank Loans and Notes Payables | 12 Months Ended
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Dec. 31, 2023
Disclosure of detailed information about borrowings [abstract] |
Bank Loans and Notes Payables | Bank Loans and Notes Payables
Expressed in millions of mexican pesos. (1) | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 and following years | Carrying value as of December 31, 2023 | Fair value as of December 31, 2023 | Carrying value as of December 31, 2022
Short- term debt:
Fixed rate debt: |  |  |  |  |  |  |  |  |
Argentine pesos |  |  |  |  |  |  |  |  |
Bank loans | 73 | — | — | — | — | — | 73 | 73 | —
Interest rate | 130.00% | — | — | — | — | — | 130.00% | — | —
Euros |  |  |  |  |  |  |  |  |
Bank loans | 15 | — | — | — | — | — | 15 | 15 | —
Interest rate | 17.60% | — | — | — | — | — | 17.60% | — | —
Subtotal | 88 | — | — | — | — | — | 88 | 88 | —
Short- term debt | 88 | — | — | — | — | — | 88 | 88 | —
Long term debt:
Fixed rate debt: |  |  |  |  |  |  |  |  |
U.S. Dollar |  |  |  |  |  |  |  |  |
Yankee bonds (2) | — | — | — | — | — | 36,352 | 36,352 | 33,719 | 41,429
Interest rate | — | — | — | — | — | 3.05% | 3.05% | — | 3.06%
Bank loans | 25 | 115 | — | — | — | — | 140 | 140 | 92
Interest rate | 6.81% | 6.73% | — | — | — | — | 6.74% | — | 6.81%
Mexican pesos |  |  |  |  |  |  |  |  |
Senior notes | — | — | — | 8,495 | 9,960 | 5,491 | 23,946 | 22,439 | 31,438
Interest rate | — | — | — | 7.87% | 7.36% | 9.95% | 8.13% | — | 7.50%
Brazilian reais |  |  |  |  |  |  |  |  |
Bank loans | 21 | 0 | — | — | — | — | 21 | 21 | 56
Interest rate | 6.90% | 6.70% | — | — | — | — | 6.90% | — | 6.96%
Uruguayan pesos |  |  |  |  |  |  |  |  |
Bank loans | — | — | — | — | — | — | — | — | 976
Interest rate | — | — | — | — | — | — | — | — | 6.27%
Subtotal | 46 | 115 | — | 8,495 | 9,960 | 41,843 | 60,459 | 56,319 | 73,991
Variable rate debt: |  |  |  |  |  |  |  |  |
Mexican pesos |  |  |  |  |  |  |  |  |
Expressed in millions of mexican pesos. (1) | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 and following years | Carrying value as of December 31, 2023 | Fair value as of December 31, 2023 | Carrying value as of December 31, 2022
Senior notes | — | 1,728 | 2,925 | — | — | — | 4,653 | 4,650 | 4,650
Interest rate | — | 11.59% | 11.55% | — | — | — | 11.57% | — | 10.41%
Brazilian reais |  |  |  |  |  |  |  |  |
Bank loans | 6 | 6 | 2 | — | — | — | 14 | 15 | 28
Interest rate | 8.81% | 8.94% | 8.94% | — | — | — | 8.88% | — | 9.77%
Subtotal | 6 | 1,734 | 2,927 | — | — | — | 4,667 | 4,666 | 4,678
Long term debt | 52 | 1,849 | 2,927 | 8,495 | 9,960 | 41,843 | 65,126 | 60,985 | 78,669
Current portion of long term debt | 52 | — | — | — | — | — | 52 | — | 8,524
Long- term debt | — | 1,849 | 2,927 | 8,495 | 9,960 | 41,843 | 65,074 | 60,985 | 70,145
(1) All interest rates shown in this table are weighted average contractual annual rates. (2) Interest rate derivatives that have been designated as fair value hedge relationships have been used by the Company to mitigate the volatility in the fair value of existing financing instruments due to changes in floating interest rate benchmarks. Gains and losses on these instruments are recorded in “market value gain (loss) in financial instruments” in the period in which they occur. Since 2022, the Company is applying fair value hedging to the hedged portion of the Senior Notes of US$ 705, which are linked to an interest rate swap. The hedging gain or loss will adjust the carrying amount of the hedged item and will be recognized in the consolidated income statements under “market value gain (loss) in financial instruments”. For the years ended on December 31, 2023, and 2022, the Company recorded in the consolidated income statements a loss of Ps. 371 and a gain of Ps. 1,647, respectively. As of December 31, 2023, and 2022 the carrying value of the Senior Note of US$ 705 is being reduced by an amount of Ps. 1,277 and 1,647 respectively, stemming from the impacts of fair value hedging. 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, 2023 and 2022, which is considered to be level 1 in the fair value hierarchy. For the years ended December 31, 2023, 2022 and 2021, 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:
| 2023 | 2022 | 2021
Interest on debts and borrowings | Ps. 4,215 | Ps. 4,104 | Ps. 4,544
Finance charges for employee benefits (See Note 16.4) | 297 | 286 | 248
Derivative instruments (Interest) | 2,086 | 1,706 | 1,097
Interest expense for leases (See Note 10) | 278 | 132 | 101
Finance operating charges | 226 | 272 | 202
| Ps. 7,102 | Ps. 6,500 | Ps. 6,192
The Company has the following debt bonds: a) registered with the Mexican stock exchange: i) Ps. 8,500 (nominal amount) with a maturity date in 2027 and fixed interest rate of 7.87%, ii) Ps. 1,727 (nominal amount) with a maturity date in 2025 and floating interest rate of Equilibrium Interbank Interest Rate (TIIE) + 0.08%, iii) Ps. 3,000 (nominal amount) with a maturity date in 2028 and fixed interest rate of 7.35%, iv) Ps. 6,965 (nominal amount) on a Sustainability-Linked Bond (“SLB”) with a maturity date in 2028 and fixed rate of 7.36%, and v) Ps. 2,435 (nominal amount) on an SLB with a maturity date in 2026 and floating rate of TIIE + 0.05%, vi) Ps.5,500 (nominal amount) with a maturity date in 2029 and a fixed rate of 9.95%, vii) Ps. 500 (nominal amount) with a maturity date in 2026 and a floating rate of TIIE + 0.05% and b) registered with the SEC: i) Senior notes of US. $ 1,041 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. $ 489 with interest at a fixed rate of 5.25% and maturity date on November 26, 2043 all of which are guaranteed by the Company´s 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”). In September 2021, the Company issued the first 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 the Company achieving key performance indicators, and in the event that such indicators are not met by the dates established in the offering documents (2024 and 2026), the interest rate on the bonds will increase by 25 basis points. As of December 31, 2023 the Company continues monitoring and expects to meet these key performance indicators, During 2022, the Company repurchased a portion of the following notes registered with the SEC i) Senior notes of US. $ 209 with maturity date on January 2030, and ii) Senior notes of US. $111 with maturity date on November 2043, representing a net savings of Ps. 408 (nominal amounts). The amounts shown on the first paragraph already consider these repurchases Additionally, during 2022, the Company issued a social and sustainable bond in the Mexican Market on a dual-tranche transaction for an amount of Ps. 6,000. During the second quarter of 2023, the Company paid on the maturity date May,12,2023 a Certificado Bursátil for i) Ps. 7,500 (nominal value) and a fixed interest rate of 5.46% Additionally, during 2023, the Company obtained bank loans in Argentina for Ps. 73. 18.1 Reconciliation of liabilities arising from financing activities.
|  | Cash flows |  | Non-cash impact |
| Carrying Value at December 31, 2022 | Repayments | Proceeds |  | New leases | Others | Fair value in Hedge Instruments | Foreign Exchange movement | Translation Effect | Carrying Value at December 31, 2023
Short-term bank loans | Ps. — | Ps. (1) | Ps. 87 |  |  |  |  | Ps. 24 | Ps. (22) | Ps. 88
Total short-term from financing activities | Ps. — | Ps. (1) | Ps. 87 |  | Ps. — | Ps. — | Ps. — | Ps. 24 | Ps. (22) | Ps. 88
Long-term bank loans | 1,152 | (900) | 64 |  |  |  |  | 152 | (293) | 175
Long-term notes payable | 77,517 | (7,500) | — |  |  | 78 | 371 | (5,515) |  | 64,951
Total long-term from financing activities | Ps. 78,669 | Ps. (8,400) | Ps. 64 |  | Ps. — | Ps. 78 | Ps. 371 | Ps. (5,363) | Ps. (293) | Ps. 65,126
Lease liabilities | Ps. 2,135 | Ps. (690) | Ps. — |  | Ps. 586 | Ps. 535 | Ps. — | Ps. (20) | Ps. (28) | Ps. 2,521
Total from financing activities | Ps. 80,804 | Ps. (9,091) | Ps. 151 |  | Ps. 586 | Ps. 613 | Ps. 371 | Ps. (5,359) | Ps. (343) | Ps. 67,735
|  | Cash flows |  | Non-cash impact |
| Carrying Value at December 31, 2021 | Repayments | Proceeds |  | New leases | Others | Fair value in Hedge Instruments | Foreign Exchange movement | Translation Effect | Carrying Value at December 31, 2022
Short-term bank loans | Ps. 645 | Ps. (521) | Ps. — |  | Ps. — | Ps. — | Ps. — | Ps. — | Ps. (124) | Ps. —
Total short-term from financing activities | Ps. 645 | Ps. (521) | Ps. — |  | Ps. — | Ps. — | Ps. — | Ps. — | Ps. (124) | Ps. —
Long-term bank loans | 1,284 | (314) | 89 |  | — | — | — | 17 | 76 | 1,152
Long-term notes payable | 83,853 | (7,597) | 6,000 |  | — | (272) | (1,647) | (2,820) | — | 77,517
Total long-term from financing activities | Ps.85,137 | Ps.(7,911) | Ps.6,089 |  | Ps.— | Ps.(272) | Ps.(1,647) | Ps.(2,803) | Ps.76 | Ps.78,669
Lease liabilities | Ps. 1,505 | Ps. (631) | Ps. — |  | Ps. 1,083 | Ps. 180 | Ps. — | Ps. 17 | Ps. (19) | Ps. 2,135
Total from financing activities | Ps. 87,287 | Ps. (9,063) | Ps. 6,089 |  | Ps. 1,083 | Ps. (92) | Ps. (1,647) | Ps. (2,786) | Ps. (67) | Ps. 80,804

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