7 Debentures and notes
Debentures and notes includes issued debt instruments in various currencies under FMO's Debt Issuance Programmes. In addition, a subordinated note of EUR 175 million is also included in the Debenture and Notes. Under IFRS this note is classified as financial liability, but for regulatory purposes is considered as Tier 2 capital. This note was issued on December 8, 2015 with a maturity of five years. The note is issued at 99.28% of the aggregated nominal amount at a fixed coupon rate of 1.5%. The note is non-convertible and can be called on first call date or the call date can be extended for another five years.
The following table summarizes the carrying value of the debentures and notes. Increase in Debentures and notes is mainly result of issuance of FMO's Green Bond.
June 30, 2019 | December 31, 2018 | |
Debentures and notes under hedge accounting | 3,428,280 | 2,697,095 |
Debentures and notes valued at AC | 2,374,601 | 2,442,786 |
Total debentures and notes | 5,802,881 | 5,139,881 |
The nominal amounts of the debentures and notes are as follows:
June 30, 2019 | December 31, 2018 | |
Debentures and notes under hedge accounting | 3,282,945 | 2,605,045 |
Debentures and notes valued at AC | 2,353,463 | 2,451,277 |
Total debentures and notes | 5,636,408 | 5,056,322 |
The movements can be summarized as follows:
2019 | |
Balance at January 1 | 5,139,881 |
Amortization of premiums/discounts | 5,815 |
Proceeds from issuance | 1,085,064 |
Redemptions | -498,507 |
Changes in fair value | 70,294 |
Changes in accrued expense | 11,972 |
Exchange rate differences | -11,638 |
Balance at June 30 | 5,802,881 |
Line item 'changes in fair value' represents the fair value changes attributable to the hedge risk in connection with the debentures and notes used for hedge accounting purposes.