Interest rate exposure
The average interest rate on borrowings in the fourth quarter of 2009 was 4.0% (2008: 5.1%). The average rate for the year was 4.3% (2008: 5.0%). Corio’s policy is to arrange between one third and two thirds of its borrowing requirement at fixed rates and an average duration of at least five years. At year-end 2009, based on the debt position in relation to the property investments, fixed rate borrowings accounted for 66% of the group’s interest bearing debt. Without this correction the percentage is 63. Fully included as floating-rate debt are a € 200 million inflation-linked loan and a € 70.5 million loan to which a minimum euribor rate of 2.65% applies. Due to the lower average borrowing amount and the reduced interest rate, the net finance expenses fell from € 127.2 million in 2008 to € 94.9 million. In 2010 about € 846 million of net borrowings will face an interest rate reset, of which € 495 million will be reset semi-annually, € 172 million quarterly and € 179 million on a monthly basis.
Source: Annual Report 2009, Chapter Overview & Strategy, page 18 (PDF, 13.679 kB)
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