Financial management stable
As of Dec 31 (€ billion)
European debt issuance program
Australian debt issuance program (AUD 5 billion)
Guaranteed unutilized credit facilities
In addition to aiming for a sustained rise in enterprise value, DB Group’s financial management focuses on maintaining a capital structure that will ensure excellent credit ratings. The key indicators used for this purpose, redemption coverage and net debt/EBITDA are detailed in the value management section.
DB AG contains DB Group’s Treasury center. This ensures that all Group companies are able to borrow and invest funds at optimal terms and conditions. Before obtaining funds from external sources, we first conduct intra-Group financing transactions. When borrowing external funds, DB AG takes out short-term loans in its own name, whereas long-term capital is generally obtained through the Groupʼs financing company, DB Finance.
The funds are passed on to the Group companies as short-term credit lines, which can be utilized as part of cash pooling on internal current accounts and/or through fixed short-term credit or in the form of long-term loans. Advantages from this concept arise from the consolidation of our know-how, realized synergy effects and minimized refinancing costs.
- A European debt issuance program (EDIP) for long-term debt financing is available. Under the EDIP, five bonds were issued in the year under review (total volume: about € 2.7 billion). Conversely, bonds with a total volume of € 1.9 billion were repaid. The utilization rate of the EDIP in this context increased slightly to 80% as of December 31, 2018 (as of December 31, 2017: 77%).
- We also have an Australian debt issuance program (Kangaroo Program). Under this program, one bond was issued and one bond from the previous year was increased (total volume: AUD 356 million (about € 0.2 billion)). The utilization rate of the Kangaroo Program increased as a result to 22% as of December 31, 2018 (as of December 31, 2017: 15%).
- In terms of short-term external financing, a multi-currency commercial paper program remains available.
- As of December 31, 2018 we also had guaranteed unutilized credit facilities with a remaining term of between 1.0 and 2.0 years and another guaranteed unutilized credit facility of more than € 0.1 billion (as of December 31, 2017: € 0.1 billion).
- In addition, we were able to rely on credit lines of € 2.5 billion for the operating business (as of December 31, 2017: € 2.2 billion). These credit lines, which are made available to our subsidiaries around the world, include provisions for financing working capital as well as sureties for payment.
No major finance lease transactions were concluded in the year under review. The finance lease volumes rose primarily as a result of taking on existing finance lease contracts for buses (€ 51 million) following the acquisition of VT-Arriva µ129, an early contract extension (€ 41 million) and a reclassification of two rental properties as part of extending a contract (€ 38 million), to € 562 million (as of December 31, 2017: € 501 million). In contrast, financing volumes decreased as scheduled through repayment.
In order to finance regional rail passenger transport vehicles, we entered into a sale and leaseback agreement for 20 new multiple units from Alstom for the Ulm diesel network. The lease contract begins on December 13, 2020 and has a calculated duration up to December 10, 2044.
DB Regional is the lessee for the first transport contract period of at least 12 years with a nominal leasing volume of € 59 million. The public transport authorities are the Bayerische Eisenbahngesellschaft mbH (BEG) and the Baden-Württemberg regional government. The financing is secured through a reuse guarantee by the BEG and an assignment of receivables from the public transport authorities in the absence of fulfillment, with defense or objection waived.
Seven bond transactions carried out
1) Increase of an existing bond.
Through the DB Group financing company, DB Finance, we issued six new bonds and increased an existing bond in the year under review. The equivalent value of the transactions was about € 2.9 billion. The funds were raised to refinance liabilities falling due and for ongoing general Group financing. All proceeds of bonds not issued in euros were converted into euros. In addition to European investors, almost a fifth of demand was from Asian investors.