Interest rate exposure is managed via the use of interest rate fixings. The Group’s policy is that between 60% - 80% of its total borrowing
should be at fixed rates of interest. At the year-end, 73% (2015: 65%) of the Group’s borrowings were at fixed rates of interest – the levels
of fixed/hedged debt remains under constant review. The Group has not used stand-alone derivative financial instruments to manage
its interest rate exposure during the year. However, The Group does have the Wider Rule Change and approval from the Homes and
Communities Agency to use stand-alone derivative financial instruments, and has facilities in place with three funding institutions to utilise
these instruments. Continuity of funding is ensured by arranging for short term borrowings and committed facilities and by limiting the
amount of debt repayable in any one year. In 2015/16 a new £30m funding facility was secured to further support the Group’s commitment
to delivering new housing supply and ensure ongoing liquidity requirements continue to be met at all times. Year-end undrawn committed
Group facilities were £66.8million (2015: £46.7 million), and with a maximum amount of £61.75 million for Accord Housing Association
(2015: £45 million). Group-wide interest payable increased to £16.675 million (2015: £14.212 million), and debt increased from £396.172
million to £400.286 million. Increased total funding facilities highlights Accord’s commitment to the development of new homes and the
regeneration of the communities we serve. The Group’s main financial covenants are in respect of loan gearing and interest cover. The
Board believes that the financial covenants entered into are appropriate for the Group’s operations. The table below provides an analysis
of when the debt falls due for repayment.
Debt
Repayment
Group
2016 2015
£m £m
0 – 1 year
12.211
9.523
1 – 2 years
11.680
10.259
2 – 3 years
12.380
8.476
3 – 5 years
29.124
24.358
5 – 10 years
90.413
85.543
10 – 15 years
84.238
93.352
15 – 20 years
90.197
85.370
20 – 25 years
61.725
68.778
25 – 30 years
8.269
10.429
Over 30 years
0.049
0.084
400.286
396.172
Total
Financial Statements 2016
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