22. Financial liabilities

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

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, including the European Investment Bank.

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 as 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. 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.

The current financial liabilities can be specified as follows:

1) Bank facilities

In April 2021, Vesteda agreed with its banks to amend the €700 million RFA, to make it a sustainability-linked RFA. The financing embeds four KPIs that measure Vesteda’s sustainability performance. In 2022, Vesteda met 3 out of 4 KPI’s, this means that Vesteda obtains a reduction in the interest margin. The sustainability-linked RFA of €700 million matures on July 1, 2025. At year-end 2022 the remaining legal term was 2.4 years and the facility was undrawn.

Pricing of the revolving credit facility is subject to a margin grid, whereby a LTV below 27.5% equates to a margin of 0.50%. Utilised commitment less than 33.3% equates to an utilisation fee of 0.10% and utilised commitments exceeding 33.3% but less or equal to 66.7% equate to an utilisation fee of 0.20%. Utilised commitments exceeding 66.7% equate to an utilisation fee of 0.40%.

Vesteda has an €150 million term loan agreement in place with the European Investment Bank (EIB). As per year end 2022, this facility was fully drawn in two tranches, both with a floating rate that mature in 2032. In December 2022 Vesteda arranged a second financing of €150 million by the EIB. This financing will also 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. It has an availability period up to 2025 and allows utilizations with a tenor of 10 years, but it is currently undrawn.

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 July 2023. The facility is funded on SMBC’s cost of funds plus a margin of 0.60%. At year-end 2022 the facility of €200 million was undrawn.

2) Euro Commercial Paper

For the short term funding need, Vesteda makes us of an Euro Commercial Paper programme up to €1 billion. At year end this programme was in use for €231 million.

3) Bonds

In 2022, 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 and further upgraded to A- in 2021, in line with Standard & Poor’s credit rating upgrade of Vesteda Residential Fund:

• Vesteda issued a bond of €500 million in senior unsecured notes in July 2018. The notes pay an annual fixed coupon of 2.00% (effective interest rate of 2.01%) and are due on 10 July 2026. The remaining term to maturity of the notes is 3.5 years.

• In May 2019 Vesteda issued its first Green Bond for an amount of €500 million in senior unsecured notes. The notes pay an annual fixed coupon of 1.50% and are due on 24 May 2027 (effective interest rate of 1.60%). The remaining term to maturity of the notes is 4.4 years.

• In October 2021 Vesteda issued its second green bond for an amount of €500 million in senior unsecured notes. The notes pay an annual fixed coupon of 0.75% and are due on 18 October 2031 (effective interest rate of 0.90%). The remaining term to maturity of the notes is 8.8 years.

4) Private Placements

Vesteda has a private placement of €100 million, 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 1.83%), payable on a semi-annual basis and are due on 16 December 2026. The remaining term to maturity of the notes is 4.0 years.

The second private placement is a green private placement and consists of two note purchase agreements. There is a 10 year tranche of €50 million with NYL at a fixed semi-annual coupon of 1.38% (effective interest rate of 1.41%) and a fifteen year tranche of €50 million with AIG at a fixed semi-annual coupon of 1.03% (effective interest rate of 1.07%). The remaining term to maturity of the notes are 8.0 and 13.0 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 1.93%) and are due on 15 December 2027. The remaining term to maturity of the notes is 5.0 years;

• A tranche of €65 million senior unsecured notes pay an annual fixed coupon of 2.478% (effective interest rate of 2.50%) and are due on 15 December 2032. The intended remaining term to maturity of the notes is 10.0 years.