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, including commercial papers, has been gradually increased and rose to 44 percent of outstanding loans at the end of the quarter.

Interest-bearing liabilities at the end of the period totalled SEK 24,436m (21,978), with an average interest rate of 2.08 per cent excluding, and 2.18 per cent including, commitment fees on the undrawn portion of committed credit facilities.

Undrawn committed credit facilities amounted to SEK 2,083m. Demand for Fabege’s green bonds has remained extremely healthy, and in the third quarter the framework for the green MTN programme was extended from SEK 2,000m to SEK 5,000m. At the end of September, outstanding bonds totalled SEK 2,600m. The green MTN programme allows the company opportunities to issue non-covered green bonds. Interest on bond loans is calculated without a Stockholm Interbank Offered Rate (STIBOR) floor, which with the current negative STIBOR rate means the financing cost at present will be extremely advantageous compared with bank loans. In addition, Fabege also had outstanding bonds of SEK 3,048m via SFF, of which SEK 2,366m related to green bonds.

The proportion of green financing totalled 35 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. During the quarter, new green bank loans totalling SEK 2,200m have been raised with two different banks.

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 30 September, the average maturity was 3.7 years and the loan-to-value ratio was 44 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 third quarter, callable interest-rate swaps of SEK 1,000m matured, while new interest-rate swaps totalling SEK 700m were signed with maturities of six to ten years. At 30 September, Fabege’s derivatives portfolio then comprised interest-rate swaps totalling SEK 9,700m with terms of maturity extending through 2027 and carrying fixed interest at annual rates of between 0.24 and2.73 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 summer 2018. Interest rates on 52 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 September, the recognised negative fair value adjustment of the portfolio was SEK 332m (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 20m, mainly pertaining to accrued opening charges for credit agreements and costs relating to bond and commercial paper programmes. The total loan volume at the end of the quarter included SEK 3,654m (2,553) in loans for projects, on which interest of SEK 44m (39) pertaining to the first three quarters of the year has been capitalised.