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. 

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

Vesteda and its banks signed a new agreement for the refinancing of its Revolving Credit Facility that matured in 2025. This facility matures in 2029, and we have the opportunity to extend it by one year.  It has a size of € 650 million and again is a Sustainability-linked Revolving Credit Facility. 

The new facility embeds four KPI’s that will measure Vesteda’s sustainability performance: minimum GRESB score, installation of solar power capacity, the reduction of actual scope 1, 2, and 3 carbon emissions (through a carbon reduction of 55% in 2030 compared to 1990) by reducing the energy consumption and the outperformance of the IVBN benchmark on tenant satisfaction.  

These KPI’s match the sustainability goals of Vesteda and are embedded in Vesteda’s strategy. If Vesteda meets the majority of these KPI’s, Vesteda obtains a reduction in interest margin. On the other hand, the interest margin will increase if Vesteda fails to meet these KPI’s. This is an extra incentive for Vesteda to improve its sustainability performance. Full year 2024 Vesteda has achieved all the proposed KPI’s.

At year-end 2024 the bank facility was drawn for € 14.5 million, by means of a drawdown under an ancillary facility, while 120 million outstanding from the previous year (2023) has been repaid. The remaining part of € 635 million was undrawn. The outstanding loans under the committed RFA are classified as non-current liabilities as Vesteda has the sole discretion to defer the settlement of these loans until the maturity date of this facility (9 April 2029).

Pricing of the revolving credit facility is subject to a rating grid, whereby a an ‘A’-rating by Standard & Poor’s equates to a margin of 0.70%. 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%. 

Term Loans

Vesteda has two facilities in place with the European Investment Bank (EIB), each worth € 150 million and original tenors of 10 years. As per year end 2024, one facility was fully drawn in two tranches, both with a floating rate that mature in 2032. The second facility of the EIB was drawn for € 75 million at fixed of 3.67%. The undrawn part of € 75 million remains available for Vesteda until December 2025 to make a drawdown. Both financings are being 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. 

As per year-end 2024, Vesteda had € 164.5 million of floating rate debt outstanding, consisting of €150 million EIB debt and €14.5 million RFA-drawings. The debt facilities provided by the EIB I and SMBC allow floating rate debt, but these floating rates are based on the base rates provided by these institutions, no IBOR-rates. Euro Commercial paper is not based on IBOR rates, but these are based on the capital markets rates.

Vesteda has an uncommitted short term 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 2025. The facility is funded on SMBC’s cost of funds plus a margin of 0.60%. At year-end 2024 the facility of €200 million was undrawn. 

In May 2024 Vesteda cancelled the committed standby facility of €250 million. The standby facility provided extra liquidity headroom and was cancelled after the third green bond issue.

2) Euro Commercial Paper

For the short term funding need, Vesteda makes use of an Euro Commercial Paper program up to €1 billion. At year end this program was not in use. 

3) Bonds

In 2023, 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 provides a credit rating for this program and this was  upgraded to A- in 2021 (from BBB+), in line with Standard & Poor’s credit rating upgrade of Vesteda Residential Fund:

• In July 2018 Vesteda issued a bond of €500 million in senior unsecured notes. 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 1.5 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 2.4 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 6.8 years.

• In May 2024 Vesteda issued its third green bond for an amount of €500 million in senior unsecured notes. The notes pay an annual fixed coupon of 4.00% and are due on 7 May 2032 (effective interest rate of 4.01%). The remaining term to maturity of the notes is 7.4 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 2.0 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 6.0 and 11.0 years respectively.

A third tranche of 100 million private placement borrowing in senior unsecured notes under the program for the issuance of Euro Medium Term Notes (EMTN) was arranged in 2017. 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 3.0 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 8.0 years.

In September 2023 Vesteda issued it’s first Green Tokenized Debt for €5 million. The proceeds of this tokenized debt are used to (re)finance sustainable middle rental housing. This agreement had a tenor of one year. The €5 million Tokenized debt is Euribor-based, but has replacement wording as well, and was repaid in September 2024.