Debt capital

2016 in review

The year 2016 represented the first full year after the end of the CMBS programme. As all refinancing obligations until 2018 had already been addressed in previous years, the debt target for 2016 was the further optimisation of Vesteda’s debt portfolio in line with its debt funding strategy by:

  • Reduction of interest costs

  • Maintaining long-term leverage target of 30% of total assets

  • Ensuring diversification of funding sources

  • Extension and diversification of maturity profile

  • Maintaining sufficient liquidity headroom to allow for acquisitions and refinancing short-term debt maturities

  • Further reduction of asset encumbrance for secured debt

At year-end 2016, Vesteda’s drawn debt capital amounted to € 1,238 million. In 2016, we continued to reduce average interest costs to 2.8% from 3.3% in 2015. Despite an increase in drawn debt per year-end 2016 of € 140 million compared to year end 2015, Vesteda maintained a leverage ratio of 28% per year-end 2016 compared to 29% a year earlier, still meeting our long-term leverage target of a leverage ratio below 30%.

The continuous improvement of our credit profile as a result of refinancing transactions and the termination of our CMBS programme, was followed by a credit rating upgrade by Standard and Poor’s to BBB+ with stable outlook in Q2 2016.

In addition, in Q2 2016 we requested the extension option of our € 600 million revolving credit facility, which extended maturity of the facility from 2020 to 2021.

In Q4 2016, Vesteda sourced a new 10-years € 100 million private placement transaction with Pricoa, which was used to prepay existing mortgage debt of € 50 million with Berlin Hyp AG and reduce the drawn amounts under our revolving credit facility.

Through these transactions, Vesteda maintained its average weighted maturity profile of 4.5 years, above its long-term minimum target of four years. The prepayment of the Berlin Hyp mortgage debt decreased asset encumbrance to 4% of asset value at year-end 2016, from 8% at year-end 2015. As per year-end 2016, Vesteda retained € 238 million of headroom under its revolving credit facility, providing flexibility and liquidity headroom to cover potential acquisitions and refinancing obligations.

Throughout 2016, we comfortably met all the financial covenants of our financing arrangements. 

Vesteda debt portfolio at year-end 2016

Facility

Type

Security

Recourse

Committed

Drawn

Average Amortisation

Maturity Date

Margin / Spread

Revolving Credit Facility

Bank Facility

Unsecured

Guarantors

€ 600,000,000

€ 362,000,000

Bullet

6/1/2021

0.90%*

FGH 1 Mortage Loan

Bank Mortgage Loan (CVF 5)

Mortgages

None

€ 33,950,000

€ 33,950,000

1.50% p.a.

1/1/2018

1.775%

FGH 2 Mortage Loan

Bank Mortgage Loan (CVF 5)

Mortgages

None

€ 21,206,250

€ 21,206,250

1.50% p.a.

1/1/2018

2.50%

FGH 3 Mortage Loan

Bank Mortgage Loan (CVF 5)

Mortgages

None

€ 20,374,159

€ 20,374,159

1.50% p.a.

1/1/2018

2.50%

Pricoa Private Placement

Private Placement Loan

Unsecured

Guarantors

€ 100,000,000

€ 100,000,000

Bullet

12/16/2026

1.13%

Pricoa Private Placement

Private Placement Loan

Unsecured

Guarantors

€ 100,000,000

€ 100,000,000

Bullet

5/8/2021

1.80%

Bond Issue 1.75% 2019

Bond, issued under EMTN programme

Unsecured

Guarantors

€ 300,000,000

€ 300,000,000

Bullet

7/22/2019

1.25%

Bond Issue 2.50% 2022

Bond, issued under EMTN programme

Unsecured

Guarantors

€ 300,000,000

€ 300,000,000

Bullet

10/27/2022

1.95%

    • *Margin grid: applicable margin per year-end 2016: 0.70% margin plus 0.20% utilisation fee.