Financial instruments
 6 Months Ended
Jun. 30, 2020
Financial Instruments - additional disclosure [abstract]  
Disclosure of detailed information about financial instruments [text block]
5. Financial instruments
Fair value by hierarchy
The following table illustrates the three hierarchical levels for valuing financial instruments at fair value as of June 30, 2020 and December 31, 2019. For additional information on the hierarchies and other matters, please refer to the Consolidated Financial Statements in the 2019 Annual Report, published on January 29, 2020.
Level 1
Level 2
Level 3
Total


(USD millions)
Jun 30,

2020
Dec 31,

2019
Jun 30,

2020
Dec 31,

2019
Jun 30,

2020
Dec 31,

2019
Jun 30,

2020
Dec 31,

2019
Marketable securities
Debt securities
24
24
24
24
Fund investments
33
37
33
37
Total marketable securities
33
37
24
24
57
61
Derivative financial instruments
136
102
136
102
Total marketable securities and derivative financial instruments
33
37
160
126
193
163
Long-term financial investments
Debt and equity securities
904
976
539
581
1 443
1 557
Fund investments
235
233
235
233
Contingent consideration receivables
444
399
444
399
Total long-term financial investments
904
976
1 218
1 213
2 122
2 189
Associated companies at fair value through profit or loss
175
186
175
186
Contingent consideration payables
– 1 039
– 1 036
– 1 039
– 1 036
Other financial liabilities
– 20
– 29
– 20
– 29
Derivative financial instruments
– 126
– 185
– 126
– 185
Total financial liabilities at fair value
– 126
– 185
– 1 059
– 1 065
– 1 185
– 1 250
During the first half of 2020, there were no significant transfers from one level to the other and no significant transactions associated with level 3 financial instruments. During the second quarter of 2020, there were two non-significant transfers of equity securities from level 3 to level 1 for USD 26 million due to Initial Public Offerings.
The fair value of straight bonds amounted to USD 27.7 billion at June 30, 2020 (USD 23.7 billion at December 31, 2019) compared to the balance sheet value of USD 25.2 billion at June 30, 2020 (USD 22.2 billion at December 31, 2019). For all other financial assets and liabilities, the carrying amount is a reasonable approximation of the fair value. The carrying amount of financial assets included in the line total long-term financial investments of USD 2.1 billion at June 30, 2020 (USD 2.2 billion at December 31, 2019) is included in line “Financial and other non-current assets” of the consolidated balance sheets.
In accordance with the consolidated foundations Alcon Inc. share divestment plans, Alcon Inc. shares with a fair value of USD 287 million were sold, or otherwise disposed of, in the first half of 2020 and the USD 16 million gain on disposal was transferred from other comprehensive income to retained earnings (second quarter : nil).
The Group’s exposure to financial risks has not changed significantly during the period and there have been no major changes to the risk management department or in any risk management policies.
Non-current financial debt – issuance of bonds
On February 11, 2020, Novartis issued the following straight bonds:


Coupon




Currency


Nominal amount

(USD millions)




Maturity year




Issuer




Issue price
Carrying value

Jun 30, 2020

(USD millions)
1.75%
USD
1 000
2025
Novartis Capital Corporation, New York, United States
99.852%
996
2.00%
USD
1 250
2027
Novartis Capital Corporation, New York, United States
99.909%
1 245
2.20%
USD
1 500
2030
Novartis Capital Corporation, New York, United States
99.869%
1 492
2.75%
USD
1 250
2050
Novartis Capital Corporation, New York, United States
97.712%
1 213