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MANAGEMENT REPORT /
Management of financial resources
•
€216.5 million of commercial papers, including €201.5 million for
an initial period of under one year and €15.0 million for an initial
period of over three years;
•
€4.1 million corresponding to the discounted value of the
minimum coupon of the mandatory convertible bonds issued
by Cofinimur I in December 2011.
The bonds which matured in 2014 (€200.0 million) were 100% refi-
nanced by drawing on available credit lines.
Bank facilities
In order to diversify its sources of financing, the Group has access
to credit lines signed with ten first-rate financial institutions. At
31.12.2014, the credit lines were made up of:
•
€812.9 million of bilateral and syndicated medium- and long-
term loans
1
, with original maturity periods of between three and
ten years, contracted from ten banks;
•
€16.6 million of other loans and advances (mainly account
debits and rental guarantees received).
Current financial debt
At 31.12.2014, Cofinimmo’s short-term financial debt alone amounted
to €473.5 million, including:
•
€257.0 million of drawings on credit lines maturing in 2015;
•
€216.5 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 totalling €608.2 million. Cofinimmo thus benefits from
the attractive cost of this short-term financing program, while
securing its refinancing if the placement of new commercial
papers was to become more expensive or impossible.
At the end of 2014, the credit lines maturing in 2015 (€282.0 million)
were 100% refinanced, as well as 35% of the credit lines maturing
in 2016.
Situation of long-term financial
commitments
The average weighed maturity of the Cofinimmo financial commit-
ments remained stable at 3.4 years at 31.12.2014. This calculation
does not take into account the short-term maturities of the com-
mercial papers which are entirely covered by undrawn portions
of the long-term credit facilities. It also excludes the maturities
which refinancing is already in place. The long-term confirmed
financial credit lines (bank lines, bonds, commercial papers of over
one year and term credit facilities), with outstandings totalling
€1,989.5 million at 31.12.2014, display a homogeneously spread
maturity profile up to 2020, with a maximum of 21% of these out-
standings maturing during the same year, 2016.
Interest rate hedging
The average cost of Cofinimmo’s debt, including bank margins,
stood at 3.43% during the financial year 2014, against 3.92% during
the financial year 2013 (also see Note 16).
At 31.12.2014, the majority of the debt was at short-term floating
rate. The convertible bonds of €364.1 million remained at fixed
rate as well as the second withdrawal of €40 million of the private
placement maturing in 2020 and the private placement of €50 mil-
lion maturing in 2017. Consequently, the company is exposed to
the 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 partially cover its overall debt (see the
chapter “Risk Factors” of this Annual Financial Report).
In 2009 and 2010, in accordance with its hedging policy and given
the uncertainty as to the evolution of the short-term interest
rates, Cofinimmo partially hedged its floating-rate debt through
the purchase of CAP options (with strikes between 3.75% and 5%)
combined with the sale of FLOOR options (with strikes between
2.75% and 3.25%) for a period until 2017. In May 2014, given the debt
reduction following the sale of the North Galaxy building and given
the continuing low interest rates (Euribor 3 months rate at 0.078%),
Cofinimmo restructured its hedging positions with the following
consequences:
•
FLOOR options with a strike at 3%
2
for a notional amount of
€600 million which extended until (and including) 2017 were
cancelled. This operation resulted in the reduction of the
average cost of debt to 3.43% at 31.12.2014 (against 3.92% at
31.12.2013) and will lead to a decrease in interest charges in the
coming years.
•
This restructuring resulted in an outlay of €56 million, fully
accounted for in the income statement at 31.12.2014
3
as
part of the risk which was hedged by the cancelled hedging
instruments had disappeared.
•
Cofinimmo also contracted new Interest Rate Swaps, over the
same period and for a notional amount of €400 million. The
average rate of these new IRS stands at 0.51%.
In total, at 31.12.2014, at constant debt, the interest rate risk is
hedged at over 70% until 2018.
The situation at 31.12.2014 of the interest rate hedging for future
years is set out in Note 24.
1
Including a Schuldschein or debt certificate entered into with two German banks.
2
The Euribor 3 months rate stood at 0.078% at 31.12.2014.
3
Under the item “Changes in fair value of financial assets and liabilities” of the
global result according to the Royal Decree of 13.07.2014 and under the item
“Revaluation of derivative financial instruments (IAS 39)” of the income statement
- analytical format.
4
This situation takes into account the cancellation in January 2015 of FLOOR
options.
Hedging of the interest rate risk for future years
4
(in %)
28.7
13.2
58.1
26.5
16.0
57.5
22.9
20.1
57.0
14.4
26.4
59.1
8.4
34.9
56.7
73.0
27.0
72.5
27.5
2.2
70.8
27.0
2015
2016
2017
2018
2019
2020
2021
2022
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Average fixed debt
Average hedged debt
Average floating debt
72