Financing

According to the publication dated May 8, 2019, Vonovia’s credit rating as awarded by the agency Standard & Poor’s is unchanged at ‘BBB+’ with a stable outlook for the long-term corporate credit rating and ‘A-2’ for the short-term corporate credit rating. At the same time, the credit rating for the issued and unsecured bonds is ‘BBB+’.

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).

As of the reporting date of September 30, 2019, Vonovia Finance B.V. had placed a total bond volume of € 12.8 billion, € 12.7 billion of which relates to the EMTN program. With effect from January 29, 2019, and as part of its EMTN program, Vonovia placed a bond with a nominal volume of € 500 million and a coupon of 1.800% maturing on June 29, 2025. The first interest payment date was June 29, 2019.

Vonovia issued two bonds for € 500 million each via its Dutch subsidiary Vonovia Finance B.V. on September 16, 2019. The two bonds were issued with a coupon of 0.50% and a maturity of 10 years, and a coupon of 1.125% and a maturity of 15 years, respectively.

Via its subsidiaries SÜDOST WOBA DRESDEN GMBH and WOHNBAU NORDWEST GmbH, Vonovia took out a 10-year loan of € 500 million from Deutsche Pfandbriefbank AG and Landesbank Baden-Württemberg in January 2019. It is secured by a real estate portfolio in Dresden.

In January 2019, Vonovia assumed an existing BUWOG loan of € 461.8 million from Berlin-Hannoversche Hypothekenbank and Hessische Landesbank. It was previously reported as a mortgage of BUWOG and is now presented separately as a portfolio loan following the takeover. The original loan agreement was between the banking syndicate and an Austrian subsidiary of BUWOG Group GmbH, as it was known at the time.

Victoria Park informed all bondholders on June 17, 2019, and repaid the corporate bond (Bond Sweden) in the amount of € 58.5 million in due form effective June 10, 2019.

On April 8, 2019, Vonovia repaid the subordinated debenture (hybrid) of € 700 million issued by Vonovia Finance B.V. in full.

On July 25, 2019, Vonovia repaid the subordinated debenture of € 600 million issued by Vonovia Finance B.V. in full.

Via its Dutch subsidiary Vonovia Finance B.V., Vonovia took out a 10-year loan for € 168 million in September 2019, secured by a real-estate portfolio in Berlin and Hamburg.

By means of buybacks in September 2019 through Vonovia Finance B.V., the bond due in December 2020 was reduced by € 498.3 million to € 751.7 million, and the bond due in March 2020 was reduced by € 199.4 million to € 300.6 million.

The debt maturity profile of Vonovia’s financing was as follows as of September 30, 2019:

Maturity Profile

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

• Limitations on incurrence of financial indebtedness
• Maintenance 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 LTV (loan to value) is as follows as of the reporting date:

The financial covenants have been fulfilled as of the reporting date.