21 Financial liabilities

The financial liabilities are made up as follows:

 

Term facilities

Mortgage

Bonds

Total

As at 1 January 2016

367

127

595

1,089

Drawn

192

  

192

Discount

  

1

1

Repayments

 

(53)

 

(53)

Additions

   

-

Amortisation

1

1

 

2

As at 31 December 2016

560

75

596

1,231

     

Drawn

  

100

100

Discount

  

1

1

Repayments

(85)

(75)

 

(160)

Financing costs

  

(1)

(1)

Amortisation

  

1

1

As at 31 December 2017

475

-

697

1,172

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. Term facilities, comprising corporate unsecured bank funding and senior unsecured notes issued under private placement transactions sourced via Vesteda Finance B.V.

  2. Bonds, issued under the EMTN programme as public senior unsecured notes or privately placed notes by Vesteda Finance B.V.

In 2017, Vesteda Residential Fund FGR discontinued its mortgage borrowing under existing financing arrangements and no longer provides Investment Property as collateral for its debt funding. Custodian Vesteda Fund V BV repaid its mortgage loan facilities with lender FGH Bank in August 2017.

1) Term facilities

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 2017, Custodian Vesteda Fund I B.V., Custodian Vesteda Fund III B.V. and Custodian Vesteda Fund IV B.V. act as guarantors for all obligations of the corporate unsecured debt that is borrowed or issued by Vesteda Finance B.V.:

  • A €600 million revolving credit facility is funded on 3-Months and 1-Month Euribor and has a 5-year initial term plus two 1-year extension request options and is provided by the lenders ABN Amro, Rabobank, BNP Paribas, Deutsche Bank and ING. The remaining legal term is 3.42 years. At year-end 2017 from the total facility of €600 million an amount of €277 million is outstanding and an amount of €323 million has not been drawn.
    Pricing of the revolving credit facility is subject to a margin grid, whereby an LTV below 32.5% equates to a margin of 0.70% 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%

  • 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 3.35 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 8.96 years.

2) Bonds

In 2017 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). The notes were rated BBB at time of issuance by Standard & Poor’s. The credit rating of the notes were upgraded to BBB+ in 2016 in line with the credit rating upgrade of Vesteda Residential Fund by Standard & Poor’s:

  • A first tranche of €300 million senior unsecured notes was issued in July 2014. The notes pay an annual fixed coupon of 1.75% and are due on 22 July 2019. The intended remaining term to maturity of the notes is 1.65 years;

  • 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 4.82 years.

  • In December 2017, Vesteda Finance B.V. issued additional €100 million senior unsecured notes under its programme for the issuance of Euro Medium Term Notes (EMTN) as a private placement transaction. The notes were rated BBB+ at time of issuance by Standard & Poor’s:

    • 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 9.96 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 14.96 years.