25 Financial liabilities

The financial liabilities are made up as follows:

 

Term facilities

Mortgage

Bonds

Total

As at 1 January 2015

835

130

300

1,265

Discount

  

(2)

(2)

Financing costs

(1)

(1)

(2)

(4)

Value net of financing costs

834

129

296

1,259

     

Drawn

270

-

300

570

Discount

-

-

(1)

(1)

Repayments

(735)

(2)

-

(737)

Additions

(3)

-

(1)

(4)

Amortisation

1

-

1

2

As at 31 December 2015

367

127

595

1,089

     

Drawn

192

  

192

Discount

  

1

1

Repayments

 

(53)

 

(53)

Additions

   

-

Amortisation

1

1

 

2

     

As at 31 December 2016

560

75

596

1,231

Financing costs amount up to € 4 million as at 31 December 2016, from which € 2 million is related to Term facilities and € 2 million to Bonds. An amount of € 2 million of the financing costs should be classified as current liabilities but relates to loans which are classified as non-current liabilities. Therefore, this amount of € 2 million is classified as non-current liabilities.

Debt Funding

The information below is provided for explanatory purposes with regard to the Vesteda Companies’ long-term funding.

The Vesteda Companies obtain their debt funding through various sources:

  1. Term facilities, comprising corporate unsecured bank funding and senior unsecured notes issued under private placement transactions sourced via Vesteda Finance BV

  2. Secured mortgage loans, borrowed by Custodian Vesteda Fund V BV

  3. Bonds, issued as senior unsecured notes by Vesteda Finance BV

1) Term Facilities

Corporate unsecured funding

Vesteda Finance BV acts as borrower and issuer of all corporate unsecured debt on behalf of Vesteda Residential Fund FGR. As per 31 December 2016, Custodian Vesteda Fund I BV, Custodian Vesteda Fund III BV and Custodian Vesteda Fund IV BV act as guarantors for all obligations of the corporate unsecured debt that is borrowed or issued by Vesteda Finance BV:

  • A € 600 million revolving credit facility is funded on 3-Months and 1-Month Euribor and has a 5-year initial term plus two 1-year extension request options and is provided by the lenders ABN Amro, Rabobank, BNP Paribas, Deutsche Bank and ING. In 2016 the first one-year extension was granted and legal maturity increased from 2020 to 2021. The remaining legal term is 4.42 years. At year-end 2016 from the total facility of € 600 million an amount of € 362 million is outstanding and an amount of € 238 million has not been drawn.
    Pricing of the revolving credit facility is subject to a margin grid, whereby an LTV below 32.5% equates to a margin of 0.70% and utilised commitments exceeding 33.3% but less or equal to 66.7% equate to a utilisation fee of 0.20%. Utilised commitments exceeding 66.7% equate to a utilisation fee of 0.40%

  • A € 100 million private placement borrowing with funds provided by PRICOA Capital Group under a note purchase agreement. The senior notes have a fixed annual coupon of 3.18%, payable on a semi-annual basis and are due on May 8, 2021. The intended remaining term to maturity of the notes is 4.35 years.

  • During 2016 Vesteda Finance BV arranged a second € 100 million borrowing under a € 100 million private placement transaction. Funds for this second private placement transaction are also provided by PRICOA Capital Group under a note purchase agreement. The senior notes have a fixed annual coupon of 1.80%, payable on a semi-annual basis and are due on December 16, 2026. The intended remaining term to maturity of the notes is 9.96 years.

2) Mortgage funding

In 2016, Vesteda Residential Fund FGR continued mortgage borrowing under its existing financing arrangements.

Mortgage loans of € 75.6 million were outstanding at year-end. The mortgage is secured on company owned property.

Custodian Vesteda Fund V BV has three mortgage loans in place with lender FGH Bank:

  • € 34.0 million 3-year H1 tranche on 3-Months Euribor, with a margin of 1.775% and intended remaining term to maturity of 1.0 years;

  • € 21.2 million 5-year H2 tranche on 3-Months Euribor, with a margin of 2.50% and intended remaining term to maturity of 1.0 years;

  • € 20.4 million 5-year H3 tranche on 3-Months Euribor, with a margin of 2.50% and intended remaining term to maturity of 1.0 years.

Custodian Vesteda Fund II BV repaid its € 50.0 million mortgage loan facility with lender Berlin Hyp AG in December 2016.

Investment Property with a fair value of € 172 million is pledged as collateral for the mortgage loan facilities.

3) Bonds

In 2016 Vesteda Finance BV continued its borrowing of senior unsecured notes that were issued under its programme for the issuance of Euro Medium Term Notes (EMTN). The notes were rated BBB at time of issuance by Standard & Poor’s. The credit rating of the notes were upgraded to BBB+ in 2016 in line with the credit rating upgrade of Vesteda Residential Fund by Standard & Poor’s:

  • A first tranche of € 300 million senior unsecured notes was issued in July 2014. The notes pay an annual fixed coupon of 1.75% and are due on 22 July 2019. The intended remaining term to maturity of the notes is 2.55 years;

  • A second tranche of € 300 million senior unsecured notes was issued in October 2015. The notes pay an annual fixed coupon of 2.50% and are due on 27 October 2022. The intended remaining term to maturity of the notes is 5.83 years.