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 €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 the sustainability bond for €500 million.

 

June 30, 2020

December 31, 2019

   

Debentures and notes under hedge accounting

4,511,174

3,773,180

Debentures and notes valued at AC

1,636,306

2,035,002

Total debentures and notes

6,147,480

5,808,182

The nominal amounts of the debentures and notes are as follows:

 

June 30, 2020

December 31, 2019

   

Debentures and notes under hedge accounting

4,296,066

3,646,496

Debentures and notes valued at AC

1,610,996

2,011,031

Total debentures and notes

5,907,062

5,657,527

The movements can be summarized as follows:

 

2020

Balance at January 1

5,808,182

Amortization of premiums/discounts

5,457

Proceeds from issuance

926,230

Redemptions

-646,089

Changes in fair value

92,383

Changes in accrued expense

450

Exchange rate differences

-39,133

Balance at June 30

6,147,480

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.