The bonded loan makes up a relatively small proportion of our total funding volume, which is expected to reach €1.1 billion this year. As before, we continue to fund ourselves primarily from the project-specific non-recourse sale of receivables, from loans in the form of unsecured syndicated loans or bilateral bank loans, and from free cash flow. Nonetheless, we regard the bonded loan as an integral part of our funding strategy as the advantages that it creates for us cannot be underestimated.
Firstly, the bonded loan funding is completely separate from individual customer projects – unlike the sale of receivables. We can use the money for growth and innovation or to fund complex or bespoke customer projects where the sale of receivables would not necessarily be suitable. What’s more, we can obtain excellent conditions with this funding instrument and, by placing the individual tranches with a variety of institutional investors, we are raising our profile in the capital markets. Ultimately, the bonded loan transactions help to cement our reputation in investor circles as a sound and reliable borrower.
Our aim was to optimize our finance costs rather than for the transaction to be significantly oversubscribed. And we achieved this objective, with an annual interest rate of 0.716 percent for the four-year tranche, for example. The fact that investor demand was nevertheless greater than our funding requirement is most probably the result of our very healthy balance sheet and our good reputation. In short, we were able to convincingly persuade institutional investors of the sustained value and reliability of our business model.