2017 Integrated Report – Departure into a new era

Financial management unchanged

As of Dec 31 (€ billion)

Volume
2017

thereof
utilized

Volume
2016

thereof
utilized

European debt
issuance program

25.0

19.3

25.0

19.6

Australian debt issuance program (AUD 5 billion)

3.4

0.5

Multi-currency
multi-issuer commercial
paper program

2.0

2.0

Guaranteed unutilized
credit facilities

2.0

2.0

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, gearing and net financial debt/EBITDA – are ex­­plained in the section value management.

  • DB Group has a European debt issuance program (EDIP) available to it for long-term debt financing. Six bondswere issued under the EDIP in the year under review (total volume: 1.5 billion). Conversely, bonds with a total volume of 1.8 billion were repaid. The degree of utilization of the EDIP as of December 31, 2017 was 77% (as of December 31, 2016: 78%).
  • We set up an Australian debt issuance program (kangaroo program) in the amount of AUD 5 billion in order to be able to react more flexibly to investor demand in the Asia/Pacific region. We issued three bonds under the new program in the year under review (total volume: AUD 0.75 billion). The degree of utilization of the kangaroo program as of December 31, 2017 was 15%.
  • A multi-currency, multi-issuer commercial paper program remains available to us in the field of short-term debt financing. It was utilized only occasionally during the year under review.
  • As of December 31, 2017 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 0.1 billion (as of December 31, 2016: 0.1 billion).
  • In addition, we were able to rely on credit lines of 2.2 billion for the operating business (as of December 31, 2016: 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. Repayments reduced the finance lease volume to € 501 million (as of December 31, 2016: € 533 million).

We concluded two sale-and-leaseback contracts to finance regional rail passenger transport vehicles.

  • The lease contract for 27 new Alstom trains for the Nuremberg S-Bahn (metro) network (batch 2) begins on December 13, 2020. The contract has an imputed term of 24 years, with DB Regional as the lessee for the first transport contract period of ten years. The nominal lease volume for this period is 82 million. The Free State of Bavaria has issued a capital service guarantee to secure the financing.
  • For the Saar E-Netz tender (batch 1), 25 new Alstom trains are being financed for an imputed lease term of 30 years from December 15, 2019. DB Regional is the lessee for the first transport contract period of 15 years with a nominal leasing volume of 97 million. The transaction is secured by financial vehicle support from the public transport authorities.

Nine bonds issued

ISIN

Issuer

Cur-
rency

Volume
(mil-

lion)

Volume
(€ mil-
lion)

Coupon (%)

Maturity

Term (years)

XS1566135098 1)

DB
Finance

NOK

700

79

2.490

Feb 2032

15.0

XS1626600040

DB
Finance

EUR

500

500

1.500

Dec 2032

15.5

XS1640854144

DB
Finance

GBP

300

341

1.375

Jul
2025

8.0

XS1648304621 1)

DB
Finance

SEK

530

55

2.200

Jul
2032

15.0

AU3CB0247401

DB
Finance

AUD

425

285

3.500

Sep 2024

7.0

AU3CB0247419

DB
Finance

AUD

175

117

3.800

Sep 2027

10.0

CH0385997108

DB
Finance

CHF

300

261

0.450

Nov 2030

13.0

AU3CB0248250

DB
Finance

AUD

150

100

4.050

Oct 2032

15.0

XS1730863260

DB
Finance

EUR

300

300

FRN

Dec 2024

7.0

1) Private placement.

In the year under review, we issued nine bonds with a countervalue of € 2.0 billion through the Group’s financing company DB Finance The funds were raised to refinance due liabilities. The proceeds of bonds not issued in euros were converted into euros.

Most of the demand for the four public issues under the European debt issuance program came from institutional investors in Europe. The two private placements went to institutional investors in Scandinavia and South Korea.

In September we issued our first bonds under the newly established Australian debt issuance program with a dual-tranche issue. Most of the demand for the three issues came from institutional investors in the Asia/Pacific region (especially Japan and Australia).