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21. Financial liabilities

The (non-current) financial liabilities can be specified as follows:

 

Bank facilities

Bonds

Private placements

Total

As at 1 January 2019

343

796

300

1,439

Drawn

655

500

-

1,155

Repayments

(991)

-

-

(991)

Reclass to Current liabilities

(8)

-

-

(8)

Financing costs

-

(6)

-

(6)

Amortisation

1

1

-

2

As at 31 December 2019

-

1,291

300

1,591

     

Drawn/Issued

-

-

100

100

Repayments

-

-

-

-

Reclass to Current liabilities

-

-

(100)

(100)

Financing costs

-

-

-

-

Amortisation

-

1

-

1

As at 31 December 2020

-

1,292

300

1,592

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. Bank facilities, comprising corporate unsecured bank funding provided by banks.

  2. Euro Commercial Paper issued by Vesteda Finance B.V. (see Current liabilities)

  3. Bonds, issued by Vesteda Finance B.V. under the EMTN programme.

  4. Private Placements under the EMTN programme as well bi-lateral agreements placed by Vesteda Finance B.V.

Corporate unsecured funding

Vesteda Finance B.V. acts as borrower and issuer of all corporate unsecured debt on behalf of Vesteda Residential Fund FGR. As per 31 December 2020, Custodian Vesteda Fund I B.V. acts as a guarantor for all obligations of the corporate unsecured debt that is borrowed or issued by Vesteda Finance B.V.

 

ECP

Bank facilities

Private placements

Totaal

As at 1 January 2019

-

343

-

343

Drawn

1,355

656

-

2,011

Repayments

(1,140)

(990)

-

(2,130)

As at 31 December 2019

215

9

-

224

     

Drawn

1,425

2,204

-

3,629

Repayments

(1,430)

(2,206)

-

(3,636)

Reclass from financial liabilities

-

-

100

100

As at 31 December 2020

210

7

100

317

1) Bank facilities

In February 2020, the second (and last) extension option of the Revolving Facility Agreement (RFA) was exercised. Five out of six lenders in the RCF approved this request. This means that €630 million out of €700 million was extended by one year to June 1, 2025. €70 million matures on June 1, 2023 as this lender declined the extension option last year as well. The facility is provided by the lenders ABN Amro, Rabobank, BNP Paribas, Deutsche Bank, ING and SMBC. The remaining legal term is 4.4 years. At year-end 2020, the total facility of €700 million was undrawn.

Pricing of the revolving credit facility is subject to a margin grid, whereby an LTV below 27.5% equates to a margin of 0.50%. Utilised commitment less than 33.3% equates to a utilisation fee of 0.10% 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%.

Vesteda has an uncommitted overdraft facility with bank SMBC for €200 million. Being an uncommitted facility it can be terminated at any time, with a Review Date of 31 May 2021. The facility is funded on SMBC’s cost of funds plus a margin of 0.60%. The remaining legal term is 0.5 years. At year-end 2020, an amount of €4 million was outstanding and €196 million was undrawn.

In December 2020 we signed a term loan agreement with the European Investment Bank (EIB). This agreement will have a tenor of 10 years and allow fixed rate and floating rate funding. Drawdowns can be made up to one and a half year after signing. The proceeds of this loan agreement will be used to fund projects in (regulated) mid-rental housing and to improve the sustainability of Vesteda’s existing portfolio, up to 50% of the total investments. This loan enables Vesteda to fund itself at very attractive rates, which will improve the Internal Rate of Return for projects in affordable housing. The EIB loan meets our funding targets, as it increases the average maturity and improves the average cost of debt. It also further diversifies our funding structure with EIB as a reputable debt investor.

2) Euro Commercial Paper

For the short term funding need, Vesteda introduced the Euro Commercial Paper programme up to €1 billion. By use of this programme, Vesteda is able to fund itself at a negative rate. At year end, this was in use for €210 million. This consists of 9 tranches from €10 million to €50 million with tenors from 1 month up to 3 months. The average rate at year end was around -0.4%.

3) Bonds

In 2020, Vesteda Finance B.V. continued its borrowing of senior unsecured notes that were issued under its program for the issuance of Euro Medium Term Notes (EMTN). Standard & Poor’s rated the notes BBB at the time of issuance. The credit rating of the notes was upgraded to BBB+ in 2016, in line Standard & Poor’s credit rating upgrade of Vesteda Residential Fund:

  • The first tranche of €300 million senior unsecured notes with an interest rate of 1.75%, issued in July 2014 and due on 22 July 2019 was repaid early, on 23 April 2019.

  • A second tranche of €300 million senior unsecured notes was issued in October 2015. The notes pay an annual fixed coupon of 2.50% (effective interest rate of -0.05%) and are due on 27 October 2022. The intended remaining term to maturity of the notes is 1.8 years.

  • A third tranche of €500 million senior unsecured notes was issued in July 2018. The notes pay an annual fixed coupon of 2.00% (effective interest rate of 0.05%) and are due on 10 July 2026. The intended remaining term to maturity of the notes is 5.5 years.

  • In May 2019 Vesteda issued its first Green Bond for an amount of €500 million in senior unsecured notes. The transaction was more than six times oversubscribed. The notes pay an annual fixed coupon of 1.50% and are due on 24 May 2026 (effective interest rate of 0.21%). The intended remaining term to maturity of the notes is 6.4 years.

4) Private Placements

The first private placement is an €100 million borrowing with funds provided by PRICOA Capital Group under a note purchase agreement. The senior notes have a fixed annual coupon of 3.18% (effective interest rate of -0.15%), payable on a semi-annual basis and are due on 8 May 2021. The intended remaining term to maturity of the notes is 0.4 years.

A second €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 1.80% (effective interest rate of 0.18%), payable on a semi-annual basis and are due on 16 December 2026. The intended remaining term to maturity of the notes is 6.0 years.

The green private placement consist of two note purchase agreements. A ten year tranche of €50 million at a fixed semi-annual coupon of 1.03% (effective interest rate of 0.57%) and a fifteen year tranche of €50 million at a fixed semi-annual coupon of 1.38% (effective interest rate of 1.01%). The intended remaining term to maturity of the notes are 10 and 15 years respectively.

A third tranche of 100 million private placement borrowing in senior unsecured notes under its program for the issuance of Euro Medium Term Notes (EMTN). Standard & Poor’s rated notes BBB+ at the time of issuance:

  • A tranche of €35 million senior unsecured notes pay an annual fixed coupon of 1.899% (effective interest rate of 0.31%) and are due on 15 December 2027. The intended remaining term to maturity of the notes is 7.0 years;

  • A tranche of €65 million senior unsecured notes pay an annual fixed coupon of 2.478% (effective interest rate of 0.74%) and are due on 15 December 2032. The intended remaining term to maturity of the notes is 12.0 years.