22. Financial liabilities

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

 

Bank facilities

Bonds

Private placements

Total

As at 1 January 2018

275

597

300

1,172

Drawn

827

500

-

1,327

Repayments

(758)

-

-

(758)

Reclass to Current liabilities

-

(300)

-

(300)

Financing costs

(2)

(2)

-

(4)

Amortisation

1

1

-

2

As at 31 December 2018

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

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.

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 2019, 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.:

1) Bank facilities

In 2019 the existing 700-million revolving credit facility was amended and extended. A Swingline facility is built into the facility agreement and the first extension option was exercised, extending the maturity date by one year to June 1, 2024. The facility has a 5-year initial term plus two 1-year extension options of which one is exercised. 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 2019, 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%.

In 2019 Vesteda repaid the €200 million revolving credit facility with Sumitomo Mitsui Banking Corporation (SMBC) arranged in 2018. A new facility was arranged with SMBC for €200 million which is uncommitted. Being an uncommitted facility it can be terminated at any time, with a Review Date of 31 May 2020. The facility is funded on SMBC’s cost of funds plus a margin of 0.50%. The remaining legal term is 0.5 years. At year-end 2019, an amount of €10 million was outstanding and €190 million of this facility was undrawn.

2) Euro Commercial Paper

 

ECP

As at 1 January 2018

-

Drawn

-

Repayments

-

As at 31 December 2018

-

  

Drawn

1,355

Repayments

(1,140)

As at 31 December 2019

215

For the short term funding need, Vesteda introduced the Euro Commercial Paper programme up to €1 billion. Four of Vesteda’s house banks act as dealer in this programme. They arrange that the Euro Commercial Paper transactions are distributed to investors. By use of this programme, Vesteda is currently able to fund itself at a negative rate. At year end 2019, this was in use for €215 million. It is required that Vesteda always has sufficient headroom in the Revolving Credit Facility of €700 million, in case Vesteda cannot make use of the Commercial paper market. The total amount of Commercial paper can therefore never exceed the total value of the Revolving Credit Facility.

3) Bonds

In 2019, Vesteda Finance B.V. continued its borrowing of senior unsecured notes that were issued under its programme 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, 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% and are due on 27 October 2022. The intended remaining term to maturity of the notes is 2.8 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% and are due on 10 July 2026. The intended remaining term to maturity of the notes is 6.5 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. The intended remaining term to maturity of the notes is 7.4 years.

4) Private Placements

A €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 3.18%, payable on a semi-annual basis and are due on 8 May 2021. The intended remaining term to maturity of the notes is 1.4 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%, payable on a semi-annual basis and are due on 16 December 2026. The intended remaining term to maturity of the notes is 7.0 years.

A third tranche of 100 million private placement borrowing in senior unsecured notes under its programme 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% and are due on 15 December 2027. The intended remaining term to maturity of the notes is 8.0 years;

  • A tranche of €65 million senior unsecured notes pay an annual fixed coupon of 2.478% and are due on 15 December 2032. The intended remaining term to maturity of the notes is 13.0 years.