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BANK FACILITIES
In order to diversify its sources of financing, the Group has access to
credit lines signed with nine first-rate financial institutions. At 31.12.2013,
the credit lines were made up of:
•
€816.9 million of bilateral and syndicated medium- and long-term
loans
1
, with original maturity periods of between three and ten years,
contracted from nine banks;
•
€15.4 million of other loans and advances (mainly account debits and
rental guarantees received).
CURRENT FINANCIAL DEBT
At 31.12.2013, Cofinimmo’s short-term financial debt alone amounted to
€455.5 million, including:
•
€204.4 million of two bonds with a nominal value of €100.0 million
each, maturing in July and November 2014;
•
€140.0 million of two credit lines maturing in 2014;
•
€103.2 million of commercial papers with a term of under one year;
the issue of short-term commercial papers is fully covered by
undrawn portions of the confirmed long-term credit facilities totaling
€613.7 million; Cofinimmo thus benefits from the attractive cost of
this short-term financing programme, while securing its refinancing
if the placement of new commercial papers was to become more
expensive or impracticable;
•
€7.9 million of other loans and advances (account debits).
The credit lines maturing in 2014 (€140.0 million) are 100% refinanced.
SITUATION OF LONG-TERM FINANCIAL COMMITMENTS
The average weighted maturity of the Cofinimmo financial commitments
(excluding the short-term maturities of commercial papers, which are fully
covered by the undrawn portions of long-term credit facilities and exclud-
ing the maturities for which the refinancing is already in place) remained
stable at 3.84 years at 31.12.2013. The long-term confirmed financial credit
lines (bank lines, bonds, commercial papers of over one year and capital
leases), with outstandings totaling €2,189.5 million on 31.12.2013, display
a homogeneously spread maturity profile up to 2020, with a maximum of
19% of these outstandings maturing during the same year 2016. 100% of
the debts maturing in 2014 and 58% of those maturing in 2015 have been
refinanced.
INTEREST RATE HEDGING
The average interest rate on the Cofinimmo debt, including bank mar-
gins, stood at 3.92% during the financial year 2013, against 3.77% during
the financial year 2012
2
(also see page 15 and Note 15).
At 31.12.2013, the majority of the debt was at short-term floating rate.
The convertible bonds of €190.8 million remained at fixed rate as well
as the second withdrawal of €40.0 million of the private placement
maturing in 2020 and the private placement of €50.0 million maturing
in 2017. Consequently, the company is exposed to a greater risk of a rise
in short-term rates, which could have a negative impact on its financial
result. Therefore, Cofinimmo uses hedging instruments such as CAPs,
generally combined with the sale of FLOORs, or IRS contracts to par-
tially cover its overall debt (see the chapter “Risk Factors” of this Annual
Financial Report).
During 2013, Cofinimmo restructured its interest rate hedging scheme.
COLLARs, consisting of CAPs bought combined with FLOORs sold, were
cancelled for the period 2013-2015. The goal of this cancellation was two-
fold. First, convertible bonds were issued for an amount of €190.8 million
at a fixed coupon of 2%, thereby reducing the floating rate debt. Second,
Cofinimmo saw the opportunity to reduce the expected charges of the
sold FLOORs for 2014 and 2015.
The total cost of the restructuring stands at €25.5 million, of which
€20.4 million have been recognised in the income statement at
31.12.2013
3
. The outstanding amount will be recognised in the income
statements of 2014 and 2015, in accordance with the applying account-
ing principles. In total, at 31.12.2013, at constant debt, the interest rate
risk is hedged at over 90% until mid 2017.
The situation at 31.12.2013 of interest rate hedging for future years is
set out in Note 23.
At the time of the writing of this Annual Financial Report, the hedging
rate of the interest rate risk, assuming constant debts, is around 88%
until 2016, 82% until 2017, and almost 77% in 2018 and 2019. Cofinimmo’s
result nevertheless remains sensitive to interest rate fluctuations (see
the chapter “Risk Factors” of this Annual Financial Report).
1
Including a Schuldschein or debt certificate entered into with two German banks.
2
Until the end of 2012, the calculation of the average interest rate on borrowings included the depreciation costs of hedging instruments pertaining to the period. As a result of the
restructuration of the hedging scheme in 2013, the method used for the calculation of the average interest rate on borrowings has been reviewed and no longer includes these costs. If this
calculation method had been applied at 31.12.2012, the average interest rate on borrowings would have stood at 3.77%, instead of 4.11% as published in the Annual Financial Report 2012.
3
Under the item “Changes in the fair value of financial assets and liabilities” of the global result according to the Royal Decree of 07.12.2010 and under the item “Revaluation of derivative
financial instruments (IAS39)” of the income statement - analytical format.
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Management of Financial Resources
\ Management Report