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DES - Online Annual Report 2009

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12. Bank loans and overdrafts

in € thousands 31.12.2009 31.12.2008
Non-current bank loans and overdrafts 921,170 879,078
Current bank loans and overdrafts 13,025 20,730
  934,195 899,808

Bank loans and overdrafts are recognised at amortised cost on the balance sheet date. The present value of loans is redetermined at the balance sheet date. To do so, the annuities due up to this time, together with any residual amount according to the redemption schedule, are discounted to the balance sheet date at market rates of interest plus a margin. The fair value of the bank loans and overdrafts at the balance sheet date is €968,000 thousand (previous year: €940,764 thousand).

Bank loans and overdrafts relate to loans raised to finance real property acquisitions and investment projects. Land charges on company properties amounting to €934,195 thousand (previous year: € 899,808 thousand) serve as collateral.

Discounts are amortised over the term of the loan. In the period under review, €5,555 thousand (previous year: €6,077 thousand) was recognised in income.

Currently, nine out of a total of 33 loan agreements contain provisions on covenants.

In all cases, these relate to debt service cover ratios (DSCRs) prescribing minimum values of between 110% and 165%. One loan is subject to an additional condition of a maximum loan-to-value ratio of 60%. This condition is reviewed every three years. The last review took place in March 2010, based on an appraiser’s opinion of value. The loan conditions have not been breached thus far and will not be breached according to current planning for 2010–2013.

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