Financing

The agency Standard & Poor’s has assigned Vonovia a long-term corporate credit rating of ‘BBB+’ with a stable outlook and a short-term credit rating of ‘A-2’. At the same time, the credit rating for the issued unsecured bonds issued is ‘BBB+’. This rating was confirmed in a letter dated September 6, 2016.

A European medium-term notes program (EMTN program) has been launched for the Group via Vonovia Finance B.V., allowing funds to be raised quickly at any time using bond issues, without any major administrative outlay. The prospectus for the EMTN program has to be updated annually and approved by the financial supervisory authority of the Grand Duchy of Luxembourg (CSSF). The current prospectus is still valid until the end of March 2017.

Vonovia Finance B.V. has placed a total bond volume of € 10.5 billion, € 6.5 billion of which relates to the EMTN program. The total volume also includes € 1.7 billion in hybrid bonds, € 1.0 billion of which is reported as equity.

The debt maturity profile of Vonovia’s financing was as follows as of December 31, 2016:

Maturity profile

Maturity profile (bar chart)Maturity profile (bar chart)

In a declaration issued on July 6, 2016, Vonovia irrevocably announced that it would be repaying the secured financing in connection with the CMBS (commercial mortgage-backed security) GRF-1 (German Residential Funding 1 from 2013), the original amount of which came to € 2.0 billion. This early repayment of € 1.8 billion was made on August 22, 2016.

Furthermore, a bond amounting to € 700 million from 2013, with a coupon of 2.125 %, was repaid as scheduled on the due date of July 25, 2016.

In September 2016, Vonovia placed a floating rate note under the EMTN program in the amount of € 500 million, which will mature on September 13, 2018, via Vonovia Finance B.V.

In order to protect against interest rate fluctuations, the floating rate note was hedged using a corresponding derivative.

In December 2016, Vonovia placed a fixed rate note under the EMTN program in the amount of € 1.0 billion, which will mature on December 6, 2024, via Vonovia Finance B.V.

In a declaration issued on November 03, 2016, Vonovia irrevocably announced that it would be repaying the secured financing in connection with the CMBS (commercial mortgage-backed security) GRF-2 (German Residential Funding 2 from 2013), the original amount of which came to € 700 million. This early repayment of € 597 million was made on November 28, 2016.

For more detailed information on financing, please refer to the relevant explanations in the Notes under “Non-Derivative Financial Liabilities.”

In connection with the issue of unsecured bonds by Vonovia Finance B.V., Vonovia has undertaken to comply with the following standard market :

  • Limitations on incurrence of financial indebtedness
  • of consolidated coverage ratio
  • Maintenance of total unencumbered assets

The existing structured and secured financing arrangements also require adherence to certain standard market covenants. Any failure to meet the agreed financial covenants could have a negative effect on the liquidity status.

The (loan to value) is as follows as of December 31, 2016. Compared with the information presented as of December 31, 2015, the adjusted net debt now includes receivables from disposals because the disposal of properties is also included in the of the real estate portfolio. Furthermore, the investments in other real estate companies are reported in the adjusted fair value of the real estate portfolio.

in € million

 

Dec. 31, 2016

 

Dec. 31, 2015

*

Value as of December 31, 2015, adjusted, full disclosure of outstanding purchase price payments from disposals

**

Value as of December 31, 2015, adjusted, separate disclosure of investments in the adjusted fair value

 

 

 

 

 

Non derivative financial liabilities

 

13,371.0

 

14,939.9

Foreign exchange rate effects

 

-209.9

 

-179.4

Cash and cash equivalents

 

-1,540.8

 

-3,107.9

Net debt

 

11,620.3

 

11,652.6

Sales receivables*

 

-135.4

 

-330.0

Additional loan amount for outstanding acquistions

 

 

134.9

Adjusted net debt*

 

11,484.9

 

11,457.5

 

 

 

 

 

Fair value of the real estate portfolio

 

27,115.6

 

24,157.7

Fair value of outstanding acquisitions

 

 

240.0

Shares in other real estate companies

 

503.1

 

13.7

Adjusted fair value of the real estate portfolio**

 

27,618.7

 

24,411.4

 

 

 

 

 

LTV

 

41.6%

 

46.9%

These financial have been fulfilled as of the reporting date.

in € million

 

Dec. 31, 2016

 

Dec. 31, 2015

 

 

 

 

 

Non-derivative financial liabilities

 

13,371.0

 

14,939.9

Total assets

 

32,522.1

 

30,959.1

LTV bond covenants

 

41.1%

 

48.3%

Rating
Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.
Covenants
Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the bond obligor to meet specific requirements or to refrain from undertaking certain activities.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
LTV Ratio (Loan-to-Value Ratio)
The LTV ratio shows the extent to which financial liabilities are covered. It shows the ratio of non-derivative financial liabilities pursuant to IFRS, less foreign exchange rate effects, cash and cash equivalents, receivables from disposals, plus purchase prices for outstanding acquisitions, to the total fair values of the real estate portfolio, plus the fair values of outstanding acquisitions and investments in other real estate companies.
Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Covenants
Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the bond obligor to meet specific requirements or to refrain from undertaking certain activities.