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41 Non-derivative Financial Liabilities

Non-derivative Financial Liabilities

Dec. 31, 2020

Dec. 31, 2021

in € million

non-current

current

non-current

current

Non-derivative financial liabilities

Liabilities to banks

6,375.2

533.8

16,997.3

4,266.1

Liabilities to other creditors

15,999.9

1,060.7

23,174.6

2,418.3

Deferred interest from non-derivative financial liabilities

115.1

172.7

22,375.1

1,709.6

40,171.9

6,857.1

Accounting Policies

Vonovia recognizes non-derivative financial liabilities, which mainly include liabilities to banks and to investors, at their fair value on the day of trading, less the directly attributable transaction costs (this generally corresponds to the acquisition cost). These liabilities are subsequently measured at amortized cost using the effective interest method. Financial liabilities are derecognized when Vonovia’s obligations specified in the contract expire or are discharged or canceled.

Liabilities bearing no interest or interest below market rates in return for occupancy rights at rents below the prevailing market rates are recorded at present value.

Deferred interest is presented as current in order to show the cash effectiveness of the interest payments transparently. In principle, the deferred interest is part of the non-derivative financial liability. Of the deferred interest from non-derivative financial liabilities, € 166.2 million (Dec. 31, 2020: € 109.8 million) is from bonds reported under non-derivative financial liabilities to other creditors.

The non-derivative financial liabilities developed as follows in the fiscal year under review:

Development of non-derivative financial liabilities in the fiscal year

in € million

As of Jan. 1, 2021

First-time consoli- dation

New loans

Scheduled repayments

Unscheduled repayments

Adjusted for effective interest method

Other adjustments

Exchange rate differences

As of Dec. 31, 2021

Bond (US dollar)

202.0

17.3

219.3

Bond (EMTN)

15,186.5

9,500.0

-500.0

-76.2

24,110.3

Bond (Green Bond)

600.0

-3.4

596.6

Promissory note loan

49.9

224.0

-4.0

-40.0

0.1

230.0

Bridge financing

12,950.0

*

-9,460.0

*

-8.4

3,481.6

Mortgages

8,531.2

12.3

575.8

-521.6

-287.3

-24.2

-123.7

-35.8

8,126.7

Deferred interest

115.1

24.5

139.6

Deutsche Wohnen

Other financing**

10,752.0

150.2

-61.4

-723.7

-23.8

-1.5

10,091.8

Deferred interest

25.8

7.3

33.1

24,084.7

10,790.1

24,000.0

-10,547.0

-1,051.0

-118.6

-93.4

-35.8

47,029.0

  1. * This includes short-term bridge financing from Société Générale of € 1,500.0 million.
  2. ** This includes mortgages, convertible bonds, registered bonds and bearer bonds.

The non-derivative financial liabilities developed as follows in the previous year:

Development of non-derivative financial liabilities in the previous year

in € million

As of Jan. 1, 2020

First-time consoli- dation

New loans

Scheduled repayments

Unscheduled repayments

Adjusted for effective interest method

Other adjustments

Exchange rate differences

As of Dec. 31, 2020

Bond (US dollar)

219.4

-17.4

202.0

Bond (EMTN)

13,545.9

2,700.0

-1,052.3

-7.1

15,186.5

Commercial paper

300.0

-300.0

0.0

Promissory note loan

49.9

49.9

Mortgages

9,359.5

97.9

1,476.6

-874.2

-1,498.2

-125.7

95.3

8,531.2

Deferred interest

100.2

14.9

115.1

23,574.9

97.9

4,176.6

-2,226.5

-1,498.2

-150.2

14.9

95.3

24,084.7

The U.S. dollar bond issued in 2013 is translated at the exchange rate at the end of the reporting period in line with applicable IFRS provisions. Allowing for the hedging rate prescribed through the interest hedging transaction entered into, this financial liability would be € 36.1 million lower than the recognized value (Dec. 31, 2020: € 18.9 million).

The maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors are as follows during the fiscal year:

Maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors in the fiscal year

Repayment of the nominal obligations is as follows:

in € million

Nominal obligation Dec. 31, 2021

Maturity

Average interest rate

2022

2023

2024

2025

2026

from 2027

Bond (US dollar)*

185.0

2023

4.58%

185.0

Bond (EMTN)*

500.0

2022

2.13%

500.0

Bond (EMTN)*

500.0

2025

1.50%

500.0

Bond (EMTN)*

1,000.0

2023

2.25%

1,000.0

Bond (EMTN)*

500.0

2022

0.88%

500.0

Bond (EMTN)*

500.0

2026

1.50%

500.0

Bond (EMTN)*

1,000.0

2024

1.25%

1,000.0

Bond (EMTN)*

500.0

2022

0.75%

500.0

Bond (EMTN)*

500.0

2027

1.75%

500.0

Bond (EMTN)*

500.0

2025

1.13%

500.0

Bond (EMTN)*

500.0

2024

0.75%

500.0

Bond (EMTN)*

500.0

2028

1.50%

500.0

Bond (EMTN)*

600.0

2022

0.79%

600.0

Bond (EMTN)*

700.0

2026

1.50%

700.0

Bond (EMTN)*

500.0

2030

2.13%

500.0

Bond (EMTN)*

500.0

2038

2.75%

500.0

Bond (EMTN)*

500.0

2023

0.88%

500.0

Bond (EMTN)*

500.0

2025

1.80%

500.0

Bond (EMTN)*

500.0

2029

0.50%

500.0

Bond (EMTN)*

500.0

2034

1.13%

500.0

Bond (EMTN)*

500.0

2023

0.13%

500.0

Bond (EMTN)*

500.0

2027

0.63%

500.0

Bond (EMTN)*

500.0

2039

1.63%

500.0

Bond (EMTN)*

500.0

2024

1.63%

500.0

Bond (EMTN)*

500.0

2030

2.25%

500.0

Bond (EMTN)*

750.0

2026

0.63%

750.0

Bond (EMTN)*

750.0

2030

1.00%

750.0

Bond (EMTN)*

500.0

2041

1.00%

500.0

Bond (Green Bond)*

600.0

2031

0.63%

600.0

Bond (EMTN)*

500.0

2024

0.00%

500.0

Bond (EMTN)*

1,000.0

2027

0.38%

1,000.0

Bond (EMTN)*

1,000.0

2029

0.63%

1,000.0

Bond (EMTN)*

1,000.0

2033

1.00%

1,000.0

Bond (EMTN)*

500.0

2041

1.50%

500.0

Bond (EMTN)*

500.0

2023

0.00%

500.0

Bond (EMTN)*

1,250.0

2025

0.00%

1,250.0

Bond (EMTN)*

1,250.0

2028

0.25%

1,250.0

Bond (EMTN)*

1,250.0

2032

0.75%

1,250.0

Bond (EMTN)*

750.0

2051

1.63%

750.0

Bridge financing

3,490.0

2022

0.65%

3,490.0

Promissory note loan*

230.0

2025

0.12%

120.0

50.0

60.0

Mortgages**

8,142.3

2034

***

1.17%

***

814.5

782.9

1,016.6

734.0

502.0

4,292.3

Deutsche Wohnen

Other financing****

9,704.1

2028

***

1.33%

***

279.9

744.7

202.4

1,562.0

889.2

6,025.9

46,651.4

6,684.4

4,332.6

3,719.0

5,046.0

3,391.2

23,478.2

  1. * Under the conditions of existing loan agreements, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  2. ** For a portion of the mortgages, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  3. *** The calculation includes financial liabilities that will be transferred to Berlin housing companies in 2022 as part of the sale of residential units. These financial liabilities are included in the “Assets and liabilities held for sale” as at December 31, 2021.
  4. **** This includes mortgages, convertible bonds, registered bonds and bearer bonds.

In the previous year, the maturities and average interest rates of the nominal obligations were as follows:

Maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors in the previous year

Repayment of the nominal obligations is as follows:

in € million

Nominal obligation Dec. 31, 2020

Maturity

Average interest rate

2021

2022

2023

2024

2025

from 2026

Bond (US dollar)*

185.0

2023

4.58%

185.0

Bond (EMTN)*

500.0

2021

3.63%

500.0

Bond (EMTN)*

500.0

2022

2.13%

500.0

Bond (EMTN)*

500.0

2025

1.50%

500.0

Bond (EMTN)*

1,000.0

2023

2.25%

1,000.0

Bond (EMTN)*

500.0

2022

0.88%

500.0

Bond (EMTN)*

500.0

2026

1.50%

500.0

Bond (EMTN)*

1,000.0

2024

1.25%

1,000.0

Bond (EMTN)*

500.0

2022

0.75%

500.0

Bond (EMTN)*

500.0

2027

1.75%

500.0

Bond (EMTN)*

500.0

2025

1.13%

500.0

Bond (EMTN)*

500.0

2024

0.75%

500.0

Bond (EMTN)*

500.0

2028

1.50%

500.0

Bond (EMTN)*

600.0

2022

0.79%

600.0

Bond (EMTN)*

700.0

2026

1.50%

700.0

Bond (EMTN)*

500.0

2030

2.13%

500.0

Bond (EMTN)*

500.0

2038

2.75%

500.0

Bond (EMTN)*

500.0

2023

0.88%

500.0

Bond (EMTN)*

500.0

2025

1.80%

500.0

Bond (EMTN)*

500.0

2029

0.50%

500.0

Bond (EMTN)*

500.0

2034

1.13%

500.0

Bond (EMTN)*

500.0

2023

0.13%

500.0

Bond (EMTN)*

500.0

2027

0.63%

500.0

Bond (EMTN)*

500.0

2039

1.63%

500.0

Bond (EMTN)*

500.0

2024

1.63%

500.0

Bond (EMTN)*

500.0

2030

2.25%

500.0

Bond (EMTN)*

750.0

2026

0.63%

750.0

Bond (EMTN)*

750.0

2030

1.00%

750.0

Promissory note loan*

50.0

2026

0.29%

50.0

Mortgages**

8,516.6

2029

1.33%

1,095.3

482.5

876.8

943.1

745.1

4,373.8

24,051.6

1,595.3

2,582.5

3,061.8

2,943.1

2,245.1

11,623.8

  1. * Under the conditions of existing loan agreements, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  2. ** For a portion of the mortgages, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.

The loan repayments shown for the following years contain contractually fixed minimum repayment amounts.

Of the nominal obligations to creditors, € 13,060.3 million (Dec. 31, 2020: € 7,287.6 million) are secured by land charges and other collateral (account pledge agreements, assignments, pledges of company shares and guarantees of Vonovia SE or other Group companies). In the event that payment obligations are not fulfilled, the securities provided are used to satisfy the claims of the banks.

Financial liabilities to banks and other creditors have an average interest rate of approximately 1.14 %. The financial liabilities as a whole do not contain any significant short-term interest rate risks as they relate either to loans with long-term fixed interest rates or variable-interest liabilities that are hedged using suitable derivative financial instruments (see chapter [G54] Financial Risk Management).

Repayment of Secured Financing

In October 2021, a secured financing agreement of some € 148.0 million that had reached full maturity was repaid.

A € 500.0 million bond issued in 2013 was also repaid in October 2021.

In December 2021, the perpetual hybrid of € 1,000 million taken out in 2014 – and recognized as equity attributable to Vonovia’s hybrid capital investors – was terminated and repaid on the first possible repayment date.

Liabilities amounting to around SEK 2,800.0 million (around € 260.0 million) were repaid as scheduled in the Swedish subgroup in the 2021 fiscal year.

Issue of Bonds Under the European Medium-Term Notes Program (EMTN)

Via its Dutch subsidiary Vonovia Finance B.V., Vonovia issued an EMTN bond of € 500.0 million that runs until January 2041 with effect from January 28, 2021. The bond will bear interest at a rate of 1.00% p.a.

On March 24, 2021 Vonovia SE issued a green bond with a total volume of € 600.0 million. The bond will bear interest at a rate of 0.625% and have a term of ten years.

Vonovia SE placed bonds with a total volume of € 4,000.0 million on June 16, 2021. The various tranches have terms of 3, 6, 8, 12 and 20 years and an average annual interest rate of 0.6875%.

Vonovia SE placed bonds with a total volume of € 5,000.0 million on September 1, 2021. They have terms of 2, 4, 7, 11 and 30 years and an average annual interest rate of 0.49%.

Promissory Note Loans

M.M. Warburg provided Vonovia SE with € 20.0 million as part of a fully digital registered bond in January 2021. This bond was repaid in full in the fourth quarter of 2021.

Deutsche Pfandbriefbank issued Vonovia SE with a promissory note loan of € 100.0 million with a term of two years in March 2021.

A promissory note loan in the amount of € 60.0 million with an eight-year term was provided by Degussa Bank in March 2021.

Also in March, M.M. Warburg subscribed to two further promissory notes of Vonovia SE, each in the amount of € 20.0 million and with a two-year term. A promissory note in the amount of € 20.0 million was repaid in full in June 2021.

New Portfolio Loans

Berlin Hyp provided Vonovia Finance B.V. with secured financing of € 200.0 million with a term of ten years, with the agreement signed in December 2020 and the funds disbursed in February 2021.

Bridge Financing

Morgan Stanley, Société Générale and Bank of America provided Vonovia SE with bridge financing in an original amount of € 20,150.0 million on August 5, 2021 with a term of up to two years as part of the acquisition of Deutsche Wohnen. This was utilized in the amount of € 11,450.0 million and still valued at around € 3,490.0 million as of December 31, 2021. This bridge financing was syndicated with eleven further banks.

Working Capital Facility

With an agreement dated September 30, 2021 Commerzbank, Bank of America, BNP Paribas, Deutsche Bank, ING, Morgan Stanley, Société Générale and UniCredit provided Vonovia with a working capital facility of € 2,000.0 million with an initial term of three years; on December 13, 2021 the facility was increased to € 3,000.0 million with the addition of Goldman Sachs, JPMorgan, Citibank and UBS. This credit line had not been used as of December 31, 2021.