Outstanding loans

Fabege employs long-term credit facilities subject to fixed terms and conditions. The company’s creditors mainly comprise the major Nordic banks supplemented by those who invest in the company's commercial papers and bonds through the capital market. 

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 23,886m (21,978), with an average interest rate of 2.14 per cent excluding, and 2.23 per cent including, commitment fees on the undrawn portion of committed credit facilities. Undrawn committed credit facilities amounted to SEK 2,083m.

During the second quarter, Fabege issued bonds through its green MTN programme. Demand on the capital market remains healthy, particularly for green bonds, and since the interest on bond loans is calculated without a Stibor floor, the negative Stibor interest means that the financing cost is currently extremely favourable compared with bank loans. The green MTN programme enables the company to issue non-covered bonds totalling SEK 2,000m, of which SEK 1,700m was unutilised at the end of the quarter. At 30 June, Fabege also had outstanding bonds totalling SEK 2,848m via SFF, of which SEK 2,166m related to green bonds.

Green financing totalled 24 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 also has a commercial paper programme of SEK 5,000m, which was fully subscribed at the end of H1. The company has available credit facilities covering all outstanding commercial papers at any given time.

At 30 June, the average maturity was 3.6 years and the loan-to-value ratio was 46 per cent (46). 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 second quarter, callable interest-rate swaps of SEK 600m matured, while new five- and ten-year interest-rate swaps totalling SEK 800m were signed. At 30 June, Fabege’s derivatives portfolio then comprised interest-rate swaps totalling SEK 10,000m with terms of maturity extending through 2027 and carrying fixed interest at annual rates of between 0.25 and 2.73 per cent before margins. Fabege also holds callable swaps totalling SEK 3,000m at interest rates of between 3.95 and 3.98 per cent before margins, maturing in the summer of 2018. Interest rates on 54 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 30 June, the recognised deficit value of the portfolio was SEK 402m (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 13m, mainly pertaining to accrued opening charges for credit agreements and bond programmes. The total loan volume at the end of the quarter included SEK 3,184bn (2,553) in loans for projects, on which interest of SEK 32m (55) had been capitalised.