Financing

According to publications dated May 7, 2018, and August 2, 2018 (which already include the acquisitions of BUWOG and Victoria Park), 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).

Vonovia Finance B.V. has currently placed a total bond volume of € 14.3 billion, € 11.8 billion of which relates to the EMTN program on the reporting date of December 31, 2018. The total volume also includes € 1.7 billion in hybrid bonds, € 1.0 billion of which is reported as equity.

In November 2017, Vonovia concluded a master commercial paper agreement via its Dutch financing company with a total volume of € 500 million with Commerzbank AG as lead arranger and several banks as traders. This master program was increased to a total volume of € 1,000 million in September 2018. Issues in the amount of € 420 million were outstanding under this program as of December 31, 2018.

The debt maturity profile of Vonovia’s financing was as follows as of December 31, 2018:

Maturity Profile

The 2018 fiscal year was characterized by the financing of the cash component of the BUWOG and Victoria Park takeovers. At the same time, financing with a volume of € 341.8 million was repaid prematurely.

Scheduled repayments were made in the amount of € 1,559.9 million, with € 803.0 million of this amount attributable to the repayments part of the commercial paper program, and € 500 million to the repayment of EMTN tranches. In return, Vonovia Finance B.V. issued bonds with a total volume of € 3,600 million as part of the EMTN program. These bonds have a term from 4.75 to 20 years and a coupon rate between 0.750% and 2.750%, whereby issues exceeding € 600 million represent floating rate bonds.

Vonovia Finance B.V. also issued short-term commercial papers in the amount of € 813 million as part of the commercial paper program with a volume of € 1,000 million.

The working capital facility was drawn down in the amount of € 100.0 million during the year.

Bridge financing worth € 2.65 billion was agreed with J.P. Morgan as part of the BUWOG takeover; however, no use was made of it. In addition, the financing provided by Berlin-Hannoversche Hypothekenbank which falls due in 2018 was extended early in January 2018 until 2028 in the amount of € 500 million.

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 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 end of the year:

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