Capital market financing has been gradually increased and rose to 40 percent of outstanding loans at the end of the quarter.
Interest-bearing liabilities at the end of the period totalled SEK 22,548m (21,978), with an average interest rate of 2.24 per cent excluding, and 2.38 per cent including, commitment fees on the undrawn portion of committed credit facilities. Unutilised committed credit facilities amounted to SEK 2,421m.
During the first quarter, Fabege increased the proportion of financing on the capital market both through its own green MTN programme and through the part-owned Svensk Fastighetsfinansiering AB (SFF). Demand on the capital market continues to be very good, particularly for green bonds, and interest on bond loans is calculated without a Stibor floor. The negative Stibor rate therefore means that the cost of financing on the capital market remains highly advantageous in comparison with bank loans, as the borrower generally does not have to assimilate the negative Stibor rate. The green MTN programme enables the company to issue non-covered bonds totalling SEK 2,000m, of which SEK 1,200 was unutilised at the end of the quarter. On 31 March, Fabege additionally had outstanding bonds of SEK 2,848m via SFF, of which SEK 2,166m related to green bonds.
Green financing totalled 23 per cent at the end of the period. As the company’s properties gain environmental certification, the objective is for financing to be sustainable as well, and Fabege welcomes and encourages the new responsible financing opportunities that are being established on the market.
Fabege has a commercial paper programme of SEK 5,000m, which was fully subscribed at the end of the quarter. The company has available credit facilities covering all outstanding commercial papers at any given time.
At 31 March, the average maturity was 3.9 years and the loan-to-value ratio was 44 per cent. The level of capital tied up in certificate loans is calculated on the basis of underlying loan commitments.
The average fixed-interest term for Fabege’s loan portfolio was 2.3 years, including the effects of derivative instruments. During the first quarter, callable interest-rate swaps of SEK 1,500m matured, while new ten-year interest-rate swaps totalling SEK 400m were signed. Fabege’s derivatives portfolio thereafter comprised interest-rate swaps totalling SEK 9,200m with terms of maturity extending through 2027 and carrying fixed interest at annual rates of between 0.26 and 2.73 per cent before margins. Fabege also holds callable swaps totalling SEK 3,600m at interest rates of between 2.92 and 3.98 per cent before margins and with maturity between 2017 and 2018. Interest rates on 57 per cent of Fabege’s loan portfolio were fixed using fixed-income derivatives. The derivatives portfolio is measured at market value and the change in value is recognised in profit or loss. At 31 March, the recognised negative fair value adjustment of the portfolio was SEK 470m (559). The derivatives portfolio is measured at the present value of future cash flows. The change in value is of an accounting nature and has no impact on the company’s cash flow. At the due date, the market value of derivative instruments is always zero.
Net financial items included other financial expenses of SEK 6m, mainly pertaining to accrued opening charges for credit agreements and bond programmes. The total loan volume per quarter included SEK 3,153bn (2,553) in loans for projects, on which interest of SEK 19m (14) had been capitalised.