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DES - Online Annual Report 2008

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12. Bank loans and overdrafts

in € thousands 31 Dec 2008 31 Dec 2007
Non-current bank loans and overdrafts 879,078 849,258
Current bank loans and overdrafts 20,730 46,694
  899,808 895,952

Bank loans and overdrafts are recognised at amortised cost on the balance sheet date. The present value of loans is re-determined on 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 amounts to €940,764 thousand (previous year: €897,972 thousand).

Bank loans and overdrafts relate to loans raised to finance real property acquisitions and investment projects. Land charges on company properties amounting to €899,808 thousand (previous year: €895,952 thousand) serve as collateral.

Discounts are amortised over the term of the loan. In the period under review, €6,077 thousand (previous year: €5,756 thousand) was recognised in income.

Currently, 6 out of a total of 27 loan agreements contain provisions on covenants. In all cases, these relate to debt service cover ratios (DSCR) 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 3 years. The next review will take 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 2009 - 2013.

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