23 Derivative financial instruments

The derivatives financial instruments movement are made up as follows:

 

2017

2016

As at 1 January

19

23

Fair value gain

(7)

(4)

Unwind transaction

(12)

-

As at 31 December

-

19

Derivatives

Ref.

Instrument type

Notional amount

Fixed rate

Effective date

Termination date

Fair value 2017

1)

IRS

340

1.999%

27.10.2015

19.12.2017

-

  

340

   

-

Hedging of Loan Portfolio

Vesteda Finance B.V. held a long-term interest rate swap contract with Rabobank at a rate of 1.99% for an original notional amount of €625 million, decreasing in 2017 to €500 million, to hedge interest rate exposure on the remaining loan portfolio of VRF with floating interest exposure, comprising the corporate credit facility and mortgage loans.

In September 2014, €135 million of notional of the IRS was unwound for a total consideration of €12 million and in October 2015 €150 million of notional of the IRS was unwound for a total consideration of €14 million. In December 2017 the remaining €215 million notional of the IRS was unwound for a total consideration of €12 million. As a result of the unwind in 2017, Vesteda has no interest derivatives outstanding per year end 2017 for hedging of its Loan Portfolio.

According to the VRF Terms and Conditions, Vesteda is required to hedge a minimum of 70% of existing interest rate exposure. At 31 December 2017, 77% of interest rate exposure was hedged through fixed rate interest loans.