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Annual Statements

Financial reporting

Price winner 2012 in the category non-listed

Home Annual Statements Financial Statements 2012 Notes to the consolidated financial statements Notes to the consolidated balance sheet Borrowings

32. Borrowings

(in thousands of euros)

Year redeemable

Interest rate

Currency

Nominal
value
(X 1000)

Hedging reference

2012

2011

XS0171966269

2013

4.38%

EUR

175,929

175,848

175,685

XS0399674216

2014

6.63%

EUR

370,704

369,885

369,155

XS0495479555

2016

4.46%

EUR

50,000

49,942

49,927

XS0459479472

2016

4.28%

EUR

15,000

14,953

14,940

XS0167622454

2018

5.16%

EUR

30,000

29,961

29,954

XS0459479399

2019

4.94%

EUR

50,000

49,862

49,841

XS0459442710

2019

4.97%

EUR

85,000

84,884

84,868

XS0621167732

2021

4.43%

EUR

438,447

408,548

404,960

XS0378569247

2038

3.16%

JPY

20,000,000

A

174,439

200,614

EMTN programme

1,358,322

1,379,944

Namensschuld- verschreibung

2023 (since 2013)

5.07%

EUR

25,000

- 100

- 100

XF0000NS4ET7

2016

5.38%

EUR

84,000

83,789

83,721

XF0000NS4FH9

2016

5.45%

EUR

40,000

39,946

39,929

XF0000NS4FX6

2016

5.16%

EUR

10,000

9,987

9,982

XF0000NS4DN2

2019

5.75%

EUR

50,000

49,226

49,099

XF0000NS4PP1

2019

5.50%

EUR

11,000

10,813

10,784

Schuldschein

193,761

193,515

European Investment Bank

2031

3.95%

EUR

180,000

166,500

175,500

ING RA Finance

2012

Euribor+mark-up

EUR

26,559

-

26,559

ING Bank

2012

Euribor+mark-up

EUR

5,781

-

5,781

ING Bank

2012

Euribor+mark-up

EUR

14,586

-

14,586

ING Bank

2012

Euribor+mark-up

EUR

15,224

-

15,224

ING Bank

2012

Euribor+mark-up

EUR

9,051

-

9,051

Handelsbanken

2016

Euribor+mark-up

EUR

109,468

D,E,F,I

109,186

-

AREB CV loans

109,186

71,201

(in thousands of euros)

Year redeemable

Interest rate

Currency

Nominal
value
(X 1000)

Hedging reference

2012

2011

Villa Carmen phase 1

2012

Euribor+mark-up

EUR

14,100

-

1,864

Avioport phase 2

2012

Euribor+mark-up

EUR

21,750

14,395

17,249

Avioport phase 1

2013

Euribor+mark-up

EUR

28,000

28,000

28,000

Other

16,157

8,538

Other borrowings

58,552

55,651

Total borrowings

1,886,221

1,875,711

The current portion of borrowings at 31 December 2012, of EUR 191.5 million (31 December 2011: EUR 101.8 million), is recognised under current liabilities.

Schiphol Group launched a Euro Medium Term Note (EMTN) programme in 1999, making it possible to raise funds of up to EUR 2.0 billion as required, provided the prospectus is updated annually. The prospectus was updated in 2012. At year-end 2012, borrowings under the programme totalled EUR 1,358.3 million (31 December 2011: EUR 1,379.9 million). Schiphol Group could be obliged to redeem the notes early in the event of specific circumstances commonly stipulated for this type of instrument. There was no obligation for this in 2012.

In June 2008, Schiphol Group launched a Euro Commercial Paper (ECP) programme with a limit of EUR 750 million in addition to the existing EMTN programme. On 31 December 2012, no short-term loans were outstanding under the ECP programme.

Schiphol Group has drawn a Namensschuldverschreibung (registered bond) that guarantees funding of EUR 25 million from 2013 at a fixed rate of interest (5.072%). The current carrying amount consists of the capitalised costs.

Schiphol Group has issued Schuldschein notes (fixed-interest loans with terms of 7 and 10 years) with a nominal value of EUR 195 million. In principle, the Schuldschein documentation includes the same covenants as the EMTN programme and provisions on ‘change of control’ in combination with a ‘downgrade below investment grade’ on early redemption.

In 2010, Schiphol Group obtained a facility of EUR 350 million from the European Investment Bank. Sums totalling EUR 180 million have been drawn from this facility (of which EUR 11.5 million has since been repaid). Schiphol Group could be obliged to redemption early if (in addition to the usual circumstances) other loans are repaid early or equity declines below 30% of total assets. Additional collateral will be demanded if the credit rating is BBB or lower (S&P) or Baa2 or lower (Moody’s). The loan agreement also contains a ‘change of control’ clause. In November 2012, Schiphol Group extended the period in which the EIB facility can be drawn to January 2014.

Borrowings under the EMTN programme, the ECP programme and the EIB facility are not subordinate to other liabilities and are eligible for voluntary early redemption.

In December 2011, AREB C.V. obtained a revolving credit facility of EUR 195 million from Svenska Handelsbanken, with a term of four years and six months. To date, EUR 179 million has been drawn on this facility (Schiphol Group’s proportional share amounted to EUR 109 million) and was used to redeem AREB C.V.’s existing loans in December 2011 and in January 2012. The loan is a mortgage and subject to mandatory early repayment if the amount of the loan exceeds 60% of the appraised value of the financed properties. To provide collateral for the repayment, AREB C.V. has granted Svenska Handelsbanken a pledge of the receivables relating to the leasehold and rental rights enjoyed by the property company vis-à-vis the tenants of the properties in its portfolio at the reporting date. AREB C.V. has also pledged all existing and future rent receivables relating to the property that are already available for pledging. Furthermore, AREB C.V. has pledged all claims and all rights derived from insurance policies with respect to the properties.

The remainder of the amount drawn under a project loan of EUR 3.9 million arranged by Villa Carmen (Schiphol Group’s proportional share being EUR 1.9 million) was repaid during 2012. There was no outstanding amount at 31 December 2012.

Avioport SpA (a 70% subsidiary of Schiphol Group) arranged a mortgage with two banks (Efibanca and Banca Popolare Italiana) for a total amount of EUR 49.8 million (EUR 28.0 million for phase 1 and EUR 21.8 million for phase 2). During 2012, Avioport SpA reached agreement with its bank on future funding in the form of an extension for a substantial part of its existing funding to 30 June 2014. As part of this, Avioport SpA repaid EUR 3.5 million of these facilities. EUR 42.4 million of this mortgage had been drawn at 31 December 2012 (EUR 28.0 million for phase 1 and EUR 14.4 million for phase 2). The collateral for phase 1 consists of the buildings, shares and rental income, while the collateral for phase 2 is the entire project. Furthermore, the shareholders have committed to contributing financial resources in addition to the loan in order to fund the overall project. A sale was decided on in 2012 and potential purchasers are actively being sought.

Schiphol Group has access to a EUR 175 million syndicated and committed one-year facility with a term to 2016. This facility has not been drawn on.

Of the total loans, EUR 174.4 million has been drawn in Japanese yen (JPY 20 billion). In line with the financial risk management policy, interest rate swaps, currency swaps and in some cases combined cross-currency swaps have been contracted on the loans to hedge the risks inherent in exposure to movements in interest rates and exchange rates. In principle, the transactions concerned correspond to all relevant characteristics of the respective loans, such as maturity and amount and hedge the positions with respect to the euro or to either fixed or capped interest rates or both. All hedging transactions are accounted for as cash flow hedges.

The derivative financial instruments comprise the following contracts, with the references relating to various loans in the analysis of borrowings.

Interest

Notional
amount

Maturity

Fair value in thousands of euros

Reference

Counterparty

Type

rate

Currency

(x1000)

date

31 December 2012

31 December 2011

A

JPMorgan

Currency swap

3.16%

JPY

20,000,000

2038

- 22,851

- 89,565

B

RBS

Rate swap

4.03%

EUR

370,000

2024

74,612

39,968

C

JPMorgan

Rate swap

3.93%

EUR

150,000

2023

31,217

16,590

D

SHB

Rate swap

3.02%

EUR

24,461

2017

2,543

-

E

SHB

Rate swap

2.90%

EUR

24,461

2017

2,429

-

F

SHB

Rate swap

3.47%

EUR

24,461

2016

2,988

-

G

BPL

Rate swap

4.32%

EUR

21,000

2013

682

909

H

JPMorgan

Forward

not applicable

AUD

116,500

2013

903

-

I

SHB

Rate swap

0.80%

EUR

35,469

2016

493

-

ING

Rate swap

2.94%

EUR

24,461

2016

-

1,704

ING

Rate swap

2.83%

EUR

24,461

2016

-

1,550

ABN AMRO

Rate swap

3.40%

EUR

24,461

2016

-

2,279

ING

Forward

n.v.t.

AUD

113,000

2012

-

6,311

Total

93,016

- 20,254

Recognised in the balance sheet under:

Non-current assets

- 22,851

- 89,565

Non-current liabilities

114,281

63,000

Current liabilities

1,586

6,311

93,016

- 20,254

Schiphol Group’s risk in respect of the cross-currency swap (reference A) is mitigated by a cash collateral agreement with JPMorgan which results in a maximum net position for both parties that depends on the parties’ credit rating. If the credit rating of either party is reduced, the maximum net position for that party will also decrease. Under the cash collateral agreement, the difference between the market value of the swap and the applicable maximum net position is paid weekly through the bank.

At 31 December 2012, the maximum net position of both parties amounted to EUR 10 million (EUR 10 million at 31 December 2011) while the market value of the swap was approximately EUR 22.9 million (EUR 89.6 million at 31 December 2011) in Schiphol Group’s favour. At 31 December 2012 JPMorgan paid Schiphol Group EUR 27.0 million (EUR 77.6 million at 31 December 2011) by way of collateral.

References B and C relate to two forward-starting interest-rate swaps which principally fix the interest rates at which outstanding EMTN loans can be refinanced in 2013 and 2014.

References D, E, F and I relate to four interest-rate swaps which fix almost all of the interest rates on AREB C.V.’s funding.

Reference H relates to the derivative financial instrument for hedging the translation differences on the Redeemable Preference Shares recognised as loans to associates.

The interest rates shown against the various currency, interest-rate and cross-currency swaps are the fixed rates at which interest is payable to the counterparty, for which interest at the variable (or fixed) rate that Schiphol Group in turn has to pay on the loans concerned is receivable from the counterparty.

The remaining terms of the borrowings at 31 December 2012 are as follows. The portion of the borrowings due within one year is recognised under current liabilities.

(in thousands of euros)

Total

<= 1 year

> 1 year

> 1 year but <= 5 years

> 5 years

EMTN programme

1,358,322

171,547

1,186,775

420,965

765,810

Namensschuldverschreibung

- 100

- 100

-

-

-

Schuldschein

193,761

- 246

194,007

133,186

60,821

European Investment Bank

166,500

9,000

157,500

36,000

121,500

AREB C.V. borrowings

109,186

-

109,186

109,186

-

Other borrowings

58,552

11,309

47,243

44,148

3,095

Total borrowings

1,886,221

191,510

1,694,711

743,485

951,226

The total carrying amount of the borrowings (at amortised cost) has the following fair value analysis:

(in thousands of euros)

Carrying amount as at
31 December 2012

Fair value as at
31 December 2012

EMTN programme

1,358,322

1,557,861

Namensschuldverschreibung

- 100

3,440

Schuldschein

193,761

242,042

European Investment Bank

166,500

204,999

AREB C.V. borrowings

109,186

115,282

Other borrowings

58,552

58,552

Total borrowings

1,886,221

2,182,176

(in thousands of euros)

Carrying amount as at
31 December 2011

Carrying amount as at
31 December 2011

EMTN programme

1,379,944

1,627,600

Namensschuldverschreibung

- 100

3,100

Schuldschein

193,515

239,100

European Investment Bank

175,500

209,400

AREB C.V. borrowings

71,201

71,201

Other borrowings

55,651

55,651

Total borrowings

1,875,711

2,206,052

Fair value is estimated by discounting the future contractual cash flows using the current market interest rates available to the borrower for similar financial instruments. The movements in borrowings during the year were as follows:

(in thousands of euros)

Borrowings > 1 year

Borrowings <= 1 year

Total

Carrying amount as at 31 December 2010

1,609,317

122,756

1,732,073

Movements in 2011

New borrowings

583,034

-

583,034

Accrued interest

4,216

-

4,216

Transferred to current liabilities

- 101,834

101,834

-

Repayments

- 338,014

- 122,756

- 460,770

Deconsolidations

- 425

-

- 425

Acquisitions

1,584

-

1,584

Exchange differences

16,283

-

16,283

Other movements

- 284

-

- 284

Total movements in the year

164,560

- 20,922

143,638

Carrying amount as at 31 December 2011

1,773,877

101,834

1,875,711

Movements in 2012

New borrowings

126,651

-

126,651

Accrued interest

78

-

78

Transferred to current liabilities

- 184,613

184,613

-

Repayments

-

- 94,937

- 94,937

Exchange differences

- 26,186

-

- 26,186

Other movements

4,904

-

4,904

Total movements in the year

- 79,166

89,676

10,510

Carrying amount as at 31 December 2012

1,694,711

191,510

1,886,221

Schiphol Group’s financial instruments comprise the borrowings and derivative financial instruments described in this note as well as the loans to associates (note 20), loans (note 23), trade and other receivables (note 26), cash and cash equivalents (note 27), a number of items in other non-current liabilities (note 36) and trade and other payables (note 38).