2018 Report on the Management of Cash, Debt and Guarantees

2018 REPORT ON THE MANAGEMENT OF CASH, DEBT AND GUARANTEES

Key figures

Amount in million EUR per 31 December 2017 2018

Classification by debt type Consolidated debt 23,320.63 23,183.67 Direct debt 5,313.89 5,998.39

Debt instruments used (direct debt) Long term EMTN 4,836.50 5,631.50 Schuldschein 37.50 37.50 Bank loans (incl. municipal loans) 95.16 181.67 Other 82.46 70.80 Short term BCP 0.00 0.00 Current accounts 262.27 76.92

Characteristics of the Flemish Debt Rating awarded by the rating agency Moody’s Long-term rating Aa2 Aa2 Outlook Stable Stable

Net financing requirements 82.43 538.63 Debt ratio 43.54% 43.62% Debt level 4.26% 4.16%

Key figures of the direct debt portfolio Fixed interest rate 95% 99% Floating interest rate 5% 1% Average interest rate 1.57% 1.40% Average remaining term to maturity (in years) 12y 10m 15y 01m

Table of contents I. INTRODUCTION ...... 5 II. THE INTEREST RATE MARKET IN 2018 AND PROSPECTS ...... 6 1. Economic situation and the interest rate market in 2018 ...... 6 2. Prospects ...... 9 III. CASH MANAGEMENT IN 2018 ...... 11 1. Overview ...... 11 2. The Net Financing Requirements (NFR) ...... 12 3. Cash pools of the Flemish government ...... 15 4. Central Financing Unit (CFU) ...... 16 5. Investments ...... 18 IV. DEBT MANAGEMENT IN 2018 ...... 20 1. Overview ...... 20 2. Direct debt ...... 21 2.1 Long-term debt instruments ...... 25 2.2 Short-term debt instruments ...... 32 2.3 Risk management ...... 34 2.4 Decree to optimise the financial assets management of the entities of the Government of Flanders ...... 39 3. Consolidated debt ...... 41 3.1 Overview of consolidated debt 2016-2018 ...... 41 3.2 Flemish Consolidated Gross Debt INR notification APR-18 ...... 44 3.3 Evolution of the consolidated gross debt in 2019 ...... 47 4. Debt standard ...... 48 5. Public-Private Partnerships ...... 49 V. GUARANTEE MANAGEMENT IN 2018 ...... 50 1. Overview ...... 50 2. Limited risk ...... 53 2.1 Excussions and recoveries ...... 54 3. A few important components ...... 55 3.1 Guarantees to (local) authorities ...... 55 3.2 Social Housing ...... 55 3.3 VIPA ...... 56 3.4 Scholen van Morgen ...... 56

3.5 Guarantees to large, medium-sized and small companies ...... 57 VI. RATING OF THE FLEMISH COMMUNITY/REGION ...... 58 VII. APPENDICES ...... 59 1. Glossary ...... 59 2. List of websites ...... 64

I. INTRODUCTION

In implementation of article 21 of the Decree of 7 May 2004 establishing the provisions regarding the cash, debt and guarantee management of the Flemish Community and the Flemish Region (Belgian Official Gazette of 16 July 2004), this report provides an overview of the cash, debt and guarantee management of the Government of Flanders during 2018. This report was finalized in May 2019.

The main highlights discussed in this 2018 annual report are:

 The Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders came into effect in the fall, with 9 Flemish entities investing 1.1 billion euros in the Flemish government;  Flanders issued its first sustainability bond in 2018;  In 2018, the Government of Flanders put 2 new benchmarks (BMs) on the international capital market: a regular bond of 750 million euros with a maturity of 20 years and a sustainability bond of 500 million euros with a maturity of 15 years;  There was a slight decrease of the consolidated debt in spite of the issue of 2 bonds;  There was a further reduction of the guaranteed debt;  As part of a voluntary merger of municipalities, 220 municipal loans were taken over by the Government of Flanders for a total amount of 95.3 million euros;  The Government of Flanders managed to retain its solid rating in 2018 thanks to its prudent financial and budget management;  There was a continued focus on the direct financing by the Government of Flanders for the consolidated entities Vlaamse Maatschappij voor Sociaal Wonen - VMSW (Flemish Social Housing Company), Vlaams Woningfonds VWF (Flemish Housing Fund) and School Invest.

II. THE INTEREST RATE MARKET IN 2018 AND PROSPECTS1

1. Economic situation and the interest rate market in 2018

In the United States the economy was running at full throttle. The economy benefited from an expansive budget policy, with the country’s economic growth rate reaching 2.9% in 2018. The unemployment rate fell below 4% and even reached 3.7% in September and November, the lowest level since 1968 (see Figure 1). The first half of the year saw inflation rise, only to fall again during the second half. Wage growth, however, continued to accelerate throughout the year. The Fed implemented its plans to further tighten its monetary policy and raised its policy rate in each quarter of 2018, reaching 2.25%-2.50% at the end of the year. The US long-term interest rate rose sharply in January as a result of fears of rising inflation. In January 2018, it went up from approximately 2.4% to 2.9%. The long-term interest rate continued to hover around this level until the start of the fourth quarter, during which it went on to climb to reach 3.2%. The interest rate subsequently fell again to approximately 2.6% as a result of less upbeat signs on the economic activity. The strong level of activity and the increases in interest rates in the US caused the dollar’s exchange rate to go up. This in turn caused the market sentiment vis-à-vis emerging markets to tip, as some had accrued substantial debts in US dollar. Countries with substantial current account debts and short-term funding requirements such as Turkey and Argentina, were hit hardest. The trade war unfolded at various fronts, but the decisions with the biggest impact were those in respect of China,which makes the trade war one of the principal explanations for the deceleration seen in the Chinese economy. However, it is by no means the only cause. The Chinese government’s policy to stem credit growth also had a negative impact on the growth.

1 Source: ING 6

Figure 1: Unemployment reached its lowest Figure 2: In the Eurozone, confidence fell level since the late 1960s, which bolstered sharply (European Commission’s Economic consumption (unemployment rate, in %) Confidence Indicator, 100= long term average)

12 116

10 114

8 112

6 110

4 108

2 106

0 104

Source: Thomson Reuters Source: Thomson Reuters

Growth in the Eurozone slowed down from 1.9% in 2017 to 1.2% in 2018. This was largely due to a weaker external environment and political uncertainty (such as the Brexit and Italy). Economic confidence also took a knock and embarked on a downward trend (see Figure 2). At the end of the year, the German automotive industry too ran into trouble which temporarily restrained growth. The upward pressure on the inflation in the Eurozone remained limited in 2018. This being the case, the ECB’s monetary policy was kept very flexible. All policy rates remained constant (see Figure 3) and in June 2018 the ECB stated that it would not be raising its policy rates before the summer of 2019. The ECB also extended its asset purchase programme. At the start of the year, the ECB said it would phase out its asset purchase scheme by September. In June, however, it decided to extend the programme until December and drive up its monthly purchases to 15 billion starting from October. The ECB is currently reinvesting maturing bonds in full.

At the start of the year, the German ten-year rate rose sharply, as did the US ten-year rate, climbing from approximately 0.35% to 0.75% in early February (see Figure 4). The long-term interest rate then fell again, before embarking on a downward trend in the fourth quarter. The long-term interest rate saw the year out at 0.25%, which was lower than a year earlier. Out of all the Eurozone countries, the long-term interest rate in Italy gave most grounds for concern. In light of the budget plans announced for 2019, which would drive up the country’s public deficit beyond what is acceptable according to the European Commission (EC), the interest rate witnessed a sharp rise in early May. As a result, the Italian economy ended up in a technical recession when quarterly growth went negative in the third as well as the fourth quarter. The war of words between Italy and the EC has been resolved for now, but there is no long-term solution for Italy’s economic problems in the offing.

Figure 3: The policy rates in the EZ remained Figure 4: Long-term interest rates in Germany and unchanged Belgium fell in 2018 (interest rate on 10-year government bonds)

0,3 1,2

0,2 1 0,1 0,8 0 0,6 -0,1 -0,2 0,4 -0,3 0,2 -0,4 0 -0,5

-0,2

1/04/2014 1/08/2014 1/12/2014 1/04/2015 1/08/2015 1/12/2015 1/04/2016 1/08/2016 1/12/2016 1/04/2017 1/08/2017 1/12/2017 1/04/2018 1/08/2018 1/12/2018

1/01/2018 1/02/2018 1/03/2018 1/04/2018 1/05/2018 1/06/2018 1/07/2018 1/08/2018 1/09/2018 1/10/2018 1/11/2018 1/12/2018 1/01/2019 1/02/2019 1/03/2019 1/04/2019 Herfinancieringsrente ECB Deposito rente ECB België Duitsland

Source: Thomson Reuters Source: Thomson Reuters

In Belgium, the economic situation continued to do well, in line with recent years, but the growth did remain below the Eurozone average. The economy grew by 1.4%. The labour market continued to do well and unemployment fell below 6%. The political uncertainty did increase in December 2018 due to the collapse of the federal government. The Belgian long-term interest rate followed a path similar to that of the German interest rate (see Figure 4). The spread of the Belgian interest rate with the German interest rate did widen during the second half of the year, as the German interest rate decreased faster than the Belgian rate.

Table 1: Macro-economic dashboard

(In %) United China Eurozone Belgium States

Economic 2017 2.3 6.9 2.5 1.7 growth 2018 2.9 6.6 1.9 1.4

2019 2.4 6.5 1.2 1.2 (ING forecast)

Inflation 2017 2.1 1.6 1.4 2.1

2018 2.4 2.2 1.8 2.1

2019 1.8 2.4 1.2 1.8 (ING forecast)

2. Prospects

In the US, the interest rate curve recently inverted: government bonds at three months now offer a higher yield than 10-year bonds. As an inverse US interest rate curve generally speaking tends to announce a recession, this has only acted to fuel fears among investors. However, the curve remains fairly flat and in the past there was usually a fair length of time between the inversion of the curve and the start of a recession. Even though we are not envisaging a recession for the US economy in 2019, we are expecting to see a deceleration from 2.9% in 2018 to 2.3% and 1.8% in 2019 and 2020 respectively. This makes future interest rate reductions less likely. The Fed recently revised its policy rate prospects and has withdrawn its plans for interest rate increases in 2019, with now just one rate increase planned in 2020, whilst the December meeting still planned two interest rate increases for 2019. Financial markets are even more pessimistic and are even assuming that the Fed will be dropping the policy rate in 2020 (see Figure 5). We currently expect the Fed to keep its interest rate stable into 2020. For the long-term interest rate, we are expecting a decreasing trend, with some volatility. At the present time we are expecting a 2.45% ten-year rate in the US by the end of 2019, set to go up to 2.20% by the end of 2020, compared with 2.6% today. As regards the Chinese economy, we believe it will pick up again. The latest figures support this outlook. The Chinese government does not want to see economic growth fall below 6%. It has already announced plans to introduce tax and monetary incentives. Doing so will momentarily sideline the aim of reducing the country’s total debt by slowing down the rising credit exposure of its population. This policy may also bring renewed upward pressure on raw material prices. A second reason for an optimistic view of the Chinese growth in 2019 is the development of the 5G infrastructure. The roll-out of this new technology supports investments and industrial production, as well as consumption at a later stage. A major sore point for China obviously is and remains the trade war with the US, over which a great deal of uncertainty remains.

Figure 5: At the present time, the Fed is not Figure 6: The €-coin indicator continued to fall planning to raise its interests in 2019 at the start of 2019

1,2

0,8

0,6

0,4

0,2

0 apr/17 jun/17 aug/17 okt/17 dec/17 feb/18 apr/18 jun/18 aug/18 okt/18 dec/18 feb/19

Source: Thomson Reuters Source: Thomson Reuters

Note: Each dot is the vote of a member of the Interest Rate Note: The €-coin indicator is a monthly estimate of the Committee. The orange line is the median interest rate quarterly growth in the Eurozone. according to the Interest Rate Committee. The grey line is what the financial markets are expecting. The Eurozone already saw a deceleration of economic growth in 2018. We expect that this trend will continue. The PMIs remain at a low level and the €-coin indicator went down to 0.2%. For Belgium, we are expecting a 1.2% growth in 2019, the same as in the Eurozone. The slower growth also means that the inflationary pressure will be limited and that the ECB will maintain a flexible monetary policy. Mario Draghi recently commented that they would not raise the policy rate before the end of 2019. We would go one further and do not think it likely we will be seeing any interest rate increases in 2020. The ECB is also set to launch a new TLTRO programme (cheaper financing for the banks) to make sure financing expenses stay low across the Eurozone. Some of Mario Draghi’s statements suggest that the ECB is considering a two-tiered system for the excess liquidities, which would serve to cancel out some of the side effects of the negative interest rate policy. We currently believe that this system will be introduced only if the aim is to drive down the interest rate further. At the start of 2019, the German ten-year rate fell below zero, but at the moment it is positive again. We would expect this interest rate to rise again towards 0.25%. The asset purchase programme has been terminated, but the ECB is continuing to reinvest the bonds at maturity, which still exerts an downward pressure on the long-term interest rate. As a result thereof, there is instead a limited upward potential for the Belgian long-term interest rate.

III. CASH MANAGEMENT IN 2018

1. Overview

Table 2 shows the monthly evolution of the Net Financing Requirements 2(NFR), the direct debt and the evolution of the current account in 2018.

Table 2: Net Financing Requirements, cash and debt position in 2018 (in thousands of euros)

Direct debt 2018 Current account 2018 (1) (2) (3a) (3b) (4)

(5) (6) (7) NFR 2018 Redemptions Withdrawals Withdrawals Direct debt

Assumption of Cash after Investments Direct debt Direct debt Current debt: IF + GFR5 Transfers Title III and and BCP Transfer '17 Account Municipal Holding excl. CFU BCP3 (excl. ‘+ evolution '18 (Ing + Belfius) + assumption Assumption CFU interest (incl. IF4) assumptions) (5 ) + (6) municipal loans of debt a/c

Transfer '17 92,909.09 4,969,156.94 -150,536.08 -25,237.04 -175,773.12

- Jan-18 -1,115,142.47 -750,022.6 300,000.0 0.00 4,519,134.36 1,740,938.17 -18,992.41 -1,759,930.58 - Feb-18 348,402.91 0.0 215,000.0 0.00 4,734,134.36 1,196,527.66 -5,298.86 -1,201,826.52

Mar-18 560,615.17 -23.0 80,000.0 0.00 4,814,111.35 -561,234.35 12,201.28 -549,033.08 - Apr-18 -987,586.22 -300,023.2 0.0 0.00 4,514,088.11 1,836,642.54 -12,694.29 -1,849,336.83 - May-18 665,271.24 0.0 0.0 0.00 4,514,088.11 1,184,065.59 0.00 -1,184,065.59 - Jun-18 -434,092.68 -23.2 0.0 0.00 4,514,064.87 1,618,181.51 -9,690.22 -1,627,871.73 - Jul-18 -452,473.54 -41.3 750,000.0 95,285.50 5,359,309.12 1,330,386.52 -299.86 -1,330,686.38

Aug-18 860,064.03 -66.0 0.0 0.00 5,359,243.14 -470,688.33 -33,490.33 -504,178.66

Sep-18 1,054,778.44 -485.3 0.0 0.00 5,358,757.86 550,114.50 1,011.73 551,126.23

Oct-18 -683,377.83 -578.4 0.0 0.00 5,358,179.45 -132,830.01 -199.90 -133,029.91

Nov-18 47,956.97 -105.0 500,000.0 0.00 5,858,074.48 414,822.09 0.00 414,822.09

Dec-18 -403,047.13 -7,400.6 1,045,980.0 0.00 6,896,653.91 1,050,354.40 -12,389.25 1,037,965.14

Total 2018 -538,631.11 -1,058,768.52 2,890,980.00 188,194.59

2 The Net Financing Requirements (NFR) are the sum of the balance of the current transactions, the capital transactions and the treasury transactions. This is referred to as a 'net' balance because the debt redemptions are not included in these transactions. In theory, the net financing requirements match with the increase in public debt. In practice, there are a number of other causes of changes in public debt (e.g. exchange rate differences or the assumption of certain debts). 3 BCP = Belgian Commercial Paper 4 IF = Investment Fund 5 GFR = Gross Financing Requirements, incl. debt redemptions 11

The Net Financing Requirements (NFR) amounted to -538.631 million euros in 2018. This is a decrease in relation to the year before (in 2017, the NFR stood at -82.4 million euros). The good result in 2017 was a consequence, among other things, of the catch-up of the delay in the registration of the property tax in 2016. Given that registrations were at a normal level in 2017, this resulted in extra cash receipts of 471 million euros in 2017.

In 2018, 1.55 billion euros in LT debt was withdrawn through the EMTN programme. As the table shows, 2 benchmarks were issued in July (750 million euros) and in November (500 million euros). Furthermore, private placements were also made in February and March, for an amount of 215 million euros and 80 million euros respectively.

At the end of January, there were ST withdrawals for an amount of 300 million euros, of which 250 million euros via the BCP programme for 3 months.

These debt withdrawals were necessary to enable the (further) direct financing of the VMSW6, the VWF7, School Invest and BAM (see also Chapter IV Debt management in 2018 for more details on the debt withdrawals and the internal financing operations).

By the end of 2018, the current account balance of the Ministry stood at 1,038 million euros, in part as a result of the Decree on the optimisation of the management of the financial assets which entered into force on 1 October 2018 (see also Chapter IV Debt management in 2018).

2. The Net Financing Requirements (NFR)

Figure 7 shows the monthly evolution of the accumulated Net Financing Requirements (NFR) for the 2016-2018 period on an annual basis. It shows the accumulated surplus/deficit of the cash receipts against cash expenditures, with the initial position reset to zero each year for comparison purposes.

The NFR of 2018 was better than the NFR of 2016, but worse than the NFR of 2017. As specified above, the good result for 2017 is due, among other things, to the delay in the registration of the property tax in 2016, which had been caught up by early 2017. As 2017 had a normal registration pace, this resulted in extra cash receipts in 2017. Nevertheless, we can see the annually recurrent pattern for the months of January, April, July and October. During these months there is always a little dip in the NFR as a result of the transfer payment of the allocations to the municipalities from the Municipality Fund. As always, the lowest point of the NFR during the year is in the month of July.

Figure 7: Monthly evolution of accumulated NFR (in million euros)

6 VMSW = Flemish Social Housing Company 7 VWF = Flemish Housing Fund 12

Monthly evolution of accumulated NFR/year (in million euros) 1.500 1.000

500

0 -500 -1.000

In million million euros In -1.500 -2.000 -2.500 -3.000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 2017 2018

For the sake of completeness, Table 3 supplies more details on the (monthly) NFR figures for 2017 and 2018.

Table 3: The monthly evolution of the NFR in figures (in million euros)

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017 NFR month -307 439 560 -473 270 -389 -649 237 1,013 -168 442 -1,058 Cumulative NFR for the year -307 133 693 220 490 101 -547 -311 702 534 975 -82 2018 NFR month -1,115 348 561 -988 665 -434 -452 860 1,055 -683 48 -403 Cumulative NFR for the year -1,115 -767 -206 -1,194 -528 -963 -1,415 -555 500 -184 -136 -539 Differences 2017 - 2018 NFR month -808 -91 0 -515 396 -45 196 623 42 -515 -394 655

The big difference in the month of January between 2017 (-307 million euros) and 2018 (-1.115 million euros) can be explained, on the one hand by the fact that the delays in the registration of the property tax had been caught up and, on the other hand, by expenditures made in January 2018 that were 550 million higher than the expenditures made in January 2017. This was due to various additional expenditures:

- the withholding tax for education workers for January 2017 was paid in error in December 2016, whereas it was correctly paid in January for

2018. This resulted in an extra expenditure in January 2018 in the amount of 306 million euros; - 100 million euros in extra grants for schools; - 30 million euros extra for the Municipal and the Provincial Fund; - 50 million euros extra for the VWF (100 million euros in January 2018 versus 50 million euros in January 2017).

As in previous years, the result of the treasury transactions involving the surcharges on property tax (OV) – on behalf of the municipalities and provinces – again played a key role in the evolution of the NFR in 2018.

The treasury transactions involving the surcharges on property tax consist of 2 major components: on the one hand the revenues effectively realised from these surcharges and on the other hand the transfer of the budgeted revenues to the municipalities and provinces. This is done in accordance with a fixed calendar in six-monthly and equal fixed tranches in the second half of the year.

Because the difference between the budgeted proceeds and the actual revenues ends up being paid or withdrawn in the year after it is processed, the receipt of these surcharges on behalf of and their transfer to the local authorities have no effect on the treasury result of the Government of Flanders over the long term. They do, however, affect the treasury result in the year in which they are collected. After all, as a result of this procedure the Flemish Community has deliberately taken on the financing risk inherent in this collection, which it carries out on behalf of the local authorities.

Figure 8: The monthly treasury result of the property tax in favour of the local authorities on the Flemish treasury (in million euros)

1.500 1.000 500 - -500 -1.000 -1.500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018

3. Cash pools of the Government of Flanders

The Government of Flanders has placed its financial accounts into two cash pools: one for ministries and one for entities having legal personality. The cash pool of the Flemish entities having legal personality is also referred to as the Central Financing Unit (CFU). The big advantage of pooling financial accounts is that the interest is calculated on the balance of the underlying accounts. This enables the government of Flanders to optimise its cash management and its interest. A cash facility is linked to each cash pool. The Government of Flanders therefore has two cash facilities, or credit lines, at its disposal8.

Figure 9 illustrates the maximum amounts drawn by the Government of Flanders from its credit lines each month. These credit lines were used throughout the entire year. The credit line of the Flemish ministries fluctuated considerably throughout the year. The largest movements on the account occur on the first and last business days of the month. On the first business day, the Government of Flanders receives its allocated amounts, grants and surcharges from the Federal Government. On the last business day of the month, the Government of Flanders pays the salaries of its civil servants and the teaching staff. The regional taxes collected by the Flemish tax authority are received on every business day. The credit line of the CFU shows considerably fewer fluctuations. Here, the aim is that the credit line fluctuate slightly below 0.

Figure 9: Evolution of the average cash position and of the most positive and negative balances of the Ministries and the CFU in 2018 (in million euros)

8 Flemish Ministries: maximum cash facility of 2.5 billion euros CFU: maximum cash facility of 0.75 billion euros 15

3.000 2.500 2.000 1.500 1.000 500 0 -500 -1.000 -1.500 -2.000 -2.500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

average cash position Fl. Comm. + CFU most negative balance Fl. Comm./month most positive balance Fl. Comm/month most negative balance CFU/month most positive balance CFU/month

In addition to indicating the range within which the Government of Flanders has worked on its credit lines, figure 9 provides insight into the average status of the cash position. The average cash position (Fl. Comm. + CFU) was slightly negative in the months of February, May and July. In the other months, the average cash position (Fl. Comm. + CFU) was positive, with particularly very positive figures seen in the last 4 months. This can partly be explained by the fact that 750 million euros was raised in July 2018 and 500 million euros was raised in November 2018 on the capital market (see also Chapter IV Debt management in 2018). In addition, the Decree on the optimisation of the management of the financial assets entered into force on 1 October 2018 (see also Chapter IV Debt management in 2018). By the end of 2018, 9 Flemish entities had invested in Flemish bonds for an amount of 1.1 billion euros.

4. Central Financing Unit (CFU)

The Central Financing Unit (CFU) is a cash pool of all the accounts of the institutions of the Government of Flanders. Depending on their status, the institutions are obliged by Decree to belong to that cash pool (for example, internal privatised agencies with legal personality and external privatised agencies under public law). The fact that they belong to the Government of Flanders’ consolidation perimeter is of no consequence. A number of entities that fall within the perimeter of the Government of Flanders have asked in past years to join the Central Financing Unit. Doing so enables them to use the advantageous terms of the banking contract and they no longer need to worry

16 about their treasury position. The members of the CFU have been asked to help with the monitoring of the treasury position by submitting their plans each week for the coming weeks.

The Central Financing Unit was established mainly in order to optimise interest and mobilise any existing reserves. Centralisation of the cash surpluses built up at the various agencies in the common treasury enables the Government of Flanders to limit its need for external financing. Were it not to do this, some agencies along with the Flemish ministries would be forced to borrow money, while others would be able to invest considerable amounts. The spread in interest rates between the invested and borrowed sums would represent an additional cost for the Government of Flanders as a whole.

Maintaining large cash surpluses at the agencies is therefore not advisable. The impact that agencies have on the cash balance of the Flemish ministries is therefore limited to their overall needs. Because of this, grants are deposited into the financial accounts of members of the cash pool only when this is dictated by the cash position of the entire cash pool. From an accounting standpoint, however, agencies may enter a receivable from the Government of Flanders from the date on which the ministerial grant decision is signed.

The necessity of transfer payments is monitored via the above-mentioned cash estimates which the participating entities are obliged to submit. The figure below shows a graphical representation of transfer payments for 2017 and 2018.

Figure 10: Overview of transfers of grants to CFU entities in 2017 and 2018 (in million euros)

The total CFU transfer payments via F&B in 2018 amounted to 6.91 billion euros.

5. Investments

The Government of Flanders invests on the basis of its cash forecasts. However, if the estimated average balance on its accounts is positive for a certain period, the Financial Operations Unit weighs up the interest terms of risk-free investments against keeping the liquid assets on the account.

In 2018, the Government of Flanders had a cash surplus in most of the months. The only possibility to invest that surplus securely, was to look for short-dated paper from the Federal government or from other Regions and Communities. However, this paper had a negative interest rate, and therefore it was decided not to invest and to maintain the cash surplus in our current account where the interest rate was 0% (there is a cap on the negative interest rate if there is a positive current account).

Furthermore there is the financing of School Invest. School Invest issues short- term commercial paper (CP) to which the Government of Flanders subscribes. Technically speaking, this is an investment for the Government of Flanders. By the end of 2018, the Government of Flanders held 112.02 million euros of this amount against 32.2 million euros by the end of 2017, i.e. a 79.82 million euro rise. On 16 December 2017, most of the School Invest CP (for an amount of

854.6 million euros) was converted into a long-term loan at 24 years with a floating interest rate. In 2018, 27 million euros of this loan was repaid in four quarterly payments, which meant the outstanding balance on 31 December 2018 amounted to 827.6 million euros.

IV. DEBT MANAGEMENT IN 2018

1. Overview

The definitions of the term ’Flemish Government debt' can be interpreted in various ways. A strict interpretation is that it is its direct debt. Broader interpretations take into account the financial debts of the consolidated entities or even the guaranteed debt. A schematic representation of these different interpretations of the word 'debt' is given below.

Figure 11: Schematic representation of the debt

Consolidated debt Guaranteed debt Indirect debt Direct debt

PPP debt

Direct debt refers to the debts that the Government of Flanders has contracted in order to cover a financing shortfall. In other words, this debt arises whenever the Net Financing Requirements (see Chapter III. Cash management in 2018) are negative. Direct debt can also arise because the Government of Flanders takes over the debt of a third party and explicitly recognises this, via a decree, as its own, direct debt. The direct financing of VWF, VMSW and School Invest affects the direct debt because the Government of Flanders incurs additional debts for this purpose.

Indirect debt is debt that has not been contracted directly by the Flemish Community or the Flemish Region, but by one of their agencies or public institutions, whereas the financial burden is borne by the Community or the Region.

Both categories of debt are included in the consolidated debt of the Government of Flanders. The consolidated debt is the sum of the debts of all entities that are part of the consolidation perimeter of the Government of Flanders, with the mutual debts cleared. The consolidated debt comprises, in addition to the direct and indirect debt, all the financial debts and in exceptional cases also other debts of all entities that, according to ESA standards, fall within the perimeter of the Government of Flanders.

In addition to these financial debts which are entered in the balance sheet of the Government of Flanders and its entities, we also distinguish two other debt categories: the guaranteed debt and the PPP debt. The guaranteed debt refers to debts contracted by enterprises or institutions that are guaranteed by the Government. This debt is not part of the actual government debt. This debt will

20 only be a burden for the government when the debtor is unable to comply with its obligations and the creditor will come knocking on the government’s door. Many of these loans are also part of the consolidated debt. The PPP debt is debt that has been entered into as part of an investment via a Public Private Partnership (PPP). These debts are sometimes guaranteed by the Government of Flanders and may be included in the consolidated debt.

2. Direct debt

Direct debt at the end of 2018 stood at 5,998.39 million euros. This 684.5 million euro rise of the direct debt is the result, among other things, of the direct financing of VMSW, VWF and School Invest (see table 5 for more details), but also because of the assumption of the municipal loans due to different mergers (see IV.2.1.3 Bank loans for further explanation).

The debt of the Flemish Community in respect of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders is not included in this table. As these are institutions which comes under the consolidation perimeter of the Government of Flanders, this debt is considered as internal debt by the INR. Consequently, it is not included as part of the outstanding direct debt (see IV.2.4 for further explanation regarding the Decree).

Table 4: Evolution of the outstanding direct debt of the Flemish Community at the end of the year for the period 2016-2018 (in million euros)

31/12/2016 31/12/2017 31/12/2018 EMTN 3,516.50 4,836.50 5,631.50 Schuldschein 37.50 37.50 37.50 Municipal loans 0.00 0.00 89.17 Bank loans Ostend Fish Market 2.46 2.25 2.03 Bank loans Municipal Holding 95.34 92.91 90.48 Ex-FRGE * 5.88 0.00 Leaseholds* * 26.16 25.17 Amoras** (Antwerp dredging scheme in association with the ** 50.42 45.63 Antwerp Port Authority) BCP/Treasury Bills 250.00 0.00 0.00 Investments in European funds -0.01 0.00 0.00 Correction CFU account*** 16.18 63.99 63.28 Negative position of MFC accounts 722.56 198.28 13.64 4,640.53 5,313.89 5,998.39 * Leaseholds included in direct debt as of KSW report of 2017 in accordance with the INR methodology ** Amoras included in direct debt since KSW report 2017 in compliance with the INR methodology *** Correction for non-S.1312 entities that belong to the CFU. On 31/12/2018, these were UZ Gent (Ghent University Hospital), OPZ (Public Psychiatric Hospital in the town of) Rekem and Geel & Natuurinvest.

The table below shows a summary of the direct financing operations in 2018.

Table 5: Direct financing in 2018 (in million euros)

Direct financing in 2018*

VMSW 700.00 VWF 220.00 School Invest 79.84 TOTAL 999.84 * Total amount

It appears that the EMTN programme undoubtedly continues to be the main instrument in terms of debt instruments with 95%.

Figure 12: Share of the various debt instruments in the direct debt at the end of 2018

The Government has opted for debt withdrawals in the long term, including 750 million euros at 20 years with a regular bond and 500 million euros at 15 years with a sustainability bond (see also below) as the term of the direct financing is also (very) long. Table 6 summarises the maturities of the direct long-term financing.

Table 6: Terms of direct financing in 2018 (in years)

Amount of direct LT financing in Terms of direct financing in 2018 2018 VMSW 28.36 700.00

VWF 25.00 220.00 Average* 27.55 920.00 * Weighted average

In spite of the fact that on average the market interest rates in 2018 were higher than in 2017, they remained low in the reported year. So it was still financially interesting in 2018 to issue (very) long term loans. Historically speaking, these remain low and attractive long-term interest rates.

Figure 13: Market interest rates in 2017 and 2018 (10-year OLO yield; in %)

1,20

1,00

0,80

0,60 2017 0,40 2018 0,20

0,00

Investor appetite was so great in 2018 that an EMTN issue of 750 million euros at 20 years was easily placed at a 1.5% coupon interest rate and a 1.546% yield. Furthermore, the Government also placed a sustainability benchmark issue in the amount of 500 million euros at 15 years with a 1.375% coupon interest and a 1.449% yield. Moreover, 2018 also saw 4 private placements at highly favourable terms.

In early 2018, the BCP programme was used for short-term loans, but only to a limited degree. On 31 December 2018, no further BCP debts were outstanding as there was no longer need for supplementary short-term financing. This was due to the good budget and cash results, the latter being, among other things, the result of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders (see IV.3.3.4 for further information).

By the end of 2018, the current account balance of the Ministry stood at 1,038 million euros. However, a positive current account is not deducted.

In what follows, we go into each of these debt instruments in greater detail.

2.1 Long-term debt instruments

2.1.1 EMTN programme

In late January 2018, a 750 million euro bond reached maturity. In July 2018, a regular benchmark issue was made in the amount of 750 million euros at 20 years. In addition, the Flemish government issued its first ever sustainability bond in November 2018. This bond raised 500 million euros with a maturity of 15 years. These benchmark issues were mainly intended to finance the expenditures of VMSW, VWF and School Invest.

Sustainability bond

Sustainability bonds are issued to finance sustainable green investments or social investments. These are in line with the sustainable development goals previously published by Flanders as part of the “Visie 2050” (Vision 2050) and “Vizier 2030” (Horizon 2030) vision papers. This type of bond is a major instrument to accomplish these goals.

As is customary in the case of sustainability bonds, a framework was established and the sustainability bond was assessed by an independent expert. The Flemish Community appointed “Sustainalytics” as a second party opinion provider, which confirmed that the bond complied with the 2018 Sustainability Bond Guidelines. Sustainalytics also confirmed that Flanders' framework is credible and will have an impact on the sustainability of the Government of Flanders.

As indicated in the framework, the resources will be used to step up the energy efficiency of buildings. In addition, affordable housing is financed and a portion of the resources is intended, among other things, to build schools, including some passive school buildings, as part of the Scholen van Morgen (Schools of Tomorrow) DBFM (design build finance and maintain) contract. Finally, Flanders will also finance initiatives in the circular economy with these resources in times to come. The allocation and impact report is to be published later this year .

The sustainability bond which the Flemish Community placed on 12 November 2018 proved a success. The bond is a public issue in the amount of 500 million euros, aimed at institutional investors. The bond is set to mature on 21 November 2033 and comes with a 1.375% coupon interest and a 1.449% yield. It was decided to go for a maturity at 15 years in order to optimally match the financing needs of the underlying assets and, in addition, to take advantage of the long-term interest rates which continue to remain at an all-time low.

Private placements

2018 saw the first ever private placement at 40 years. The placement raised 80 million euros at a particularly favourable 1.874% interest rate. Private placements at such a lengthy term are highly exceptional for the Flemish Community. This shows that Flanders is able to raise money on the market at favourable terms. This private placement occurred, among other things, in anticipation of the future financing of BAM, for which a 350 million euro capital increase took place in 2018, of which 87.5 million euros was immediately paid up in full.

Tables 7, 8 and 9 respectively provide a summary of the benchmark issues in 2018, the private placements in 2018 (under the EMTN programme) and the outstanding EMTN issues as per 31/12/2018.

Table 7: Benchmark issues in 2018 (in euros)

Amount Coupon Yield Start Maturity date outstanding Benchmark issue 750,000,000 1.500% 1.546% 12/07/2018 12/07/2038 Sustainability Benchmark 500,000,000 1.375% 1.449% 21/11/2018 21/11/2033 issue TOTAL 1,250,000,000

Table 8: Private placements in 2018 (in euros)

Amount Coupon Yield Start Maturity date outstanding Private Placement 125,000,000 0.000% -0.318% 01/02/2018 01/02/2020 Private Placement 30,000,000 1.603% 1.603% 28/02/2018 01/03/2038 Private Placement 60,000,000 1.863% 1.865% 28/02/2018 28/02/2048 Private Placement 80,000,000 1.874% 1.874% 28/03/2018 28/03/2058 TOTAL 295,000,000

Table 9: The outstanding EMTN issues (including private placements; status as per 31/12/2018; in euros)

Amount Maturity date outstanding Coupon EMTN 50,000,000 0.000% 14/06/2019 EMTN 125,000,000 0.000% 01/02/2020 EMTN 30,000,000 3.650% 10/03/2020 EMTN 140,000,000 3.116% 18/08/2020 EMTN 133,500,000 0.854% 04/07/2022 EMTN 626,500,000 1.341% 12/06/2025 EMTN 750,000,000 0.375% 13/10/2026 EMTN 56,500,000 1.707% 20/11/2030 EMTN 140,000,000 1.007% 10/11/2031 EMTN 500,000,000 1.375% 21/11/2033 EMTN 180,000,000 1.887% 12/06/2035 EMTN 800,000,000 1.000% 13/10/2036 EMTN 20,000,000 1.656% 23/02/2038 EMTN 30,000,000 1.603% 01/03/2038 EMTN 750,000,000 1.500% 12/07/2038 EMTN 10,000,000 1.392% 12/11/2041 EMTN 1,000,000,000 1.875% 02/06/2042 EMTN 35,000,000 2.317% 03/07/2045 EMTN 115,000,000 1.564% 12/11/2046 EMTN 60,000,000 1.863% 28/02/2048 EMTN 80,000,000 1.874% 28/03/2058

TOTAL 5,631,500,000

2.1.2 Schuldschein9

No Schuldschein were issued in 2018. The outstanding Schuldschein are shown in the table below.

Table 10: The outstanding Schuldschein (status as per 31/12/2018; in euros)

Amount Interest Maturity date outstanding Schuldschein 17,500,000 1.007% 10/11/2031 Schuldschein 20,000,000 1.564% 12/11/2046 TOTAL 37,500,000

9 This is a loan agreement under German law. 27

2.1.3 Bank loans

Municipal loans

The Voluntary Merger of Municipalities Decree of 24 June 2016 (referred to below as the Decree) sets out specific provisions regarding the financial bonus in the shape of debt assumptions offered by the Government of Flanders to municipalities who voluntary decide to merge, with particular reference to articles 58 and 59. In addition, article 60 of the Decree stipulates that the Government of Flanders may enact implementing rules for the debt assumptions. This was done in the decision of the Government of Flanders of 24 February 2017 establishing the implementing rules for the debt assumption as part of the voluntary merger of municipalities.

The municipalities that submitted a joint proposal to merge on 1 January 2019 to the Government of Flanders by 31 December 2017, benefited from a takeover of their debts by the Government of Flanders in the amount of 500 euro in debts per resident of the municipalities to be merged, with a maximum of 20,000,000 euro per merger. By taking over these debts, the Government of Flanders assumed as the new debtor a portion of the outstanding debts of the former debtors (municipalities, autonomous municipal agencies, public social welfare centres) which means it is now under obligation to repay the debts (capital redemptions and interests) to the financial institutions.

The loans were taken over at the end of the month that followed the publication of the merger decrees. For each merger, a separate Merger Decree was enacted. These merger decrees were published on 1 June 2018. As such, the debt assumption took place on 31 July 2018.

In all, 15 municipalities were involved in 7 mergers. Table 11 shows a summary of the mergers, the amount and the number of loans of the debt assumption, the average interest rate and the average time remaining to maturity at the time of assumption.

Table 11: Summary of the mergers, amounts, number of loans of the debt assumptions, average interest rates and average times remaining to maturity

Average Average time Old New Amount of debt Number interest remaining to municipalities municipalities assumption of loans rate maturity Aalter 7 years and Aalter 14,217,500.00 73 3.530% Knesselare 10 months Deinze 12 years and Deinze 20,000,000.00 11 4.670% Nevele 3 months Kruishoutem 7 years and 6 Kruisem 7,832,000.00 17 2.020% Zingem months Lovendegem 7 years and 2 Waarschoot Lievegem 12,921,000.00 53 4.580% months Zomergem Meeuwen- 7 years and Gruitrode Oudsbergen 11,689,500.00 29 2.860% 10 months Opglabbeek Neerpelt 2 years and Pelt 15,960,000.00 23 0.700% Overpelt 11 months Puurs Puurs-Sint- 12,665,500.00 14 3.620% 7 years Sint-Amands Amands 7 years and TOTAL 95,285,500.00 220 3.240% 8 months

At the time of the assumption, the 220 loans assumed, which represented a total sum of 95.3 million euros, had an average time remaining to maturity of 7 years and 8 months and an average 3.24% interest rate. These are all loans with annual, semestrial, quarterly and even monthly redemptions and/or interest payments. There are no bullet loans among them.

Below is a summary of the number of loans assumed per financial institution. As was to be expected, the bulk of the loans, i.e. 83%, were taken out with Belfius.

Figure 14: Breakdown of the loans assumed according to bank

Most of the municipal loans assumed already saw one or several maturity dates in 2018. Starting from August 2018, a sum of 6,114,284.73 euros was already repaid in principal, across 153 loans. This means the outstanding debt as per 31 December 2018 stood at 89,171,215.27 euros.

From the 31 July 2018 assumption date, the Flemish Community has owed interests over each of the loans assumed. As such, 1,329,613.24 euros was paid on the contractual interest maturity dates.

Gemeentelijke Holding [Municipal Holding Company]

In early December 2011, the Municipal Holding Company went into voluntary liquidation. The Government of Flanders, together with the other regions, guaranteed the loans of this holding company. In accordance with the liquidation and its final settlement, the Government of Flanders analysed the guaranteed loans. Further to this analysis, it was decided not to pay out the guarantee - save for a small portion - but to take over the loans for a total of 222.6 million euros. At the time of the voluntary liquidation, the interest rate of the loans taken over was lower than the interest rate at which the Government of Flanders would have borrowed for a similar term. This increased the long-term debt of the Government of Flanders.

These loans were included in the direct debt of the Government of Flanders on 7 December 2011.

Table 12 shows a summary of the (remaining) loans assumed. In 2018, 2.4 million euros in principal was repaid which means the outstanding debt as per 31 December 2018 stood at 90.5 million euros.

Table 12: Outstanding loans assumed as part of the voluntary liquidation of the Municipal Holding (status as per 31/12/2018; in euros)

Bank Nominal amount Interest Maturity date Belfius 10,000,000 3.783% 20/07/2020 Belfius 15,000,000 3.656% 06/10/2020 Belfius 9,727,273 3.768% 15/12/2022 Belfius 5,750,000 4.324% 11/09/2019 Belfius 25,000,000 4.455% 11/09/2026 BNP Paribas Fortis 25,000,000 4.065% 19/03/2021 TOTAL 90,477,273

Ostend Fish Market

In mid-2009, the Government of Flanders decided to approve the transfer of the lands of the City of Ostend to the Flemish Region and the acquisition of property by the Flemish Region within the framework of the Ostend Fish Market. In exchange, the Flemish Region took over, among other things, the outstanding debt of the City of Ostend for the management and operation of the land dedicated to fish market and port activities, as well as those adjoining the fishing port.

In practical terms, the Flemish Region took over the bank loans granted to the city of Ostend. The underlying condition was that the notarial deed for the “Agreement on partial termination of the contract of 5-12 August 1912 with respect to the fishing harbour at Ostend and termination of the right and long- term lease granted on an administration building” between the City of Ostend, the Flemish Region and the Ostend Autonomous Municipal Port Company (AGHO) would be passed before 1 January 2010. This transfer was aimed at freeing the City of Ostend from these debts vis-à-vis the relevant credit institutions for the outstanding balance on 1 January 2010, namely 3,854,891.94 euros.

These loans have been included in the direct debt of the Government of Flanders.

Table 13 shows a summary of the (remaining) loans assumed from Ostend Fish Auction (status as per 31/12/2018). In 2018, 0.2 million euros in principal was repaid which means the outstanding debt as per 31 December 2018 stood at 2.0 million euros.

Table 13: Outstanding loans assumed from the Ostend Fish Auction (status as per 31/12/2018; in euros)

Amount Bank Interest Maturity date outstanding Belfius 205,096 0.45% 01/07/2024 BNP Paribas Fortis 677,840 4.06% 31/03/2025 KBC 1,085,016 5.25% 15/01/2028 KBC 57,474 5.85% 15/10/2028 TOTAL 2,025,425

2.1.4 Paid and attributable interest

For the year 2018, the following interest amounts were posted in the accounts and paid for the EMTNs, Schuldschein and bank loans (see Table 14).

Table 14: Summary of the paid and attributable interests EMTNs, Schuldschein and bank loans 2018 (in euros)

Attributable Paid EMTN & Schuldschein

62,750,874.41 74,802,985.00 Municipal loans 1,350,191.71 1,329,613.24 Bank loans (Fish Auction and Municipal Holding) 3,863,497.14 3,877,063.59 Total 67,964,563.26 80,009,661.83

2.2 Short-term debt instruments

2.2.1 Bank credit line

In addition to the above-mentioned long-term debt instruments, the Government of Flanders also makes intensive use of its credit line. The use of this credit line allows diversification through withdrawals at floating interest rates (i.e. EONIA (European OverNight Index Average)). The long-term instruments have now all been concluded with a fixed interest rate. The Government of Flanders is committed to striking a balance between achieving maximum security regarding the required interest budget and making use of the (mostly) lower short-term interest rates.

As in 2016 and 2017, revenue was also generated in 2018 by using the credit line. The current banking contract provides that in the event of a negative current account balance combined with a negative interest rate (EONIA), the bank must pay compensatory interest.

By the end of 2018, 76.92 million euros in “debts” were outstanding over the current accounts (see table 4: correction CFU account 63.28 million euros + negative status Fl. Comm. Min. accounts 13.64 million euros). However, the current account balance of the Ministry amounted to 1,038 million euros, in part as a result of the Decree on the optimisation of the management of the financial assets of the public entities of the Government of Flanders which came into effect in October 2018. The idea was to invest the bulk of this money with the Belgian Debt Agency, but this failed to go ahead due to a human error at ING.

2.2.2 Belgian Commercial Paper

In addition to long-term external financing, the Flemish Administration has been operating a Belgian Commercial Paper (BCP) programme since 2009. This was set up at the time to be able to absorb temporary cash shortages. With this programme, the Government of Flanders can issue short-term papers on the Belgian market. The programme was set up with a maximum of 1.5 billion euros outstanding at the same time.

The traders who are allowed to place the Flemish short term paper on the market are selected through an invitation to tender.

This BCP programme is not only used to cover temporary cash shortfalls, but also to diversify part of the debt portfolio with short-term interest rates.

In 2018, this programme was used to a lesser extent. By the end of 2018, no further BCP debts were outstanding as there was no longer a need for supplementary short-term financing. This was due to the good budget and cash results, the latter being, among other things, the result of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders (see IV.3.3.4 for further information).

2.2.3 Investment Fund for Local Authorities

The debit balance of the Investment Fund for Local Authorities was included in the direct debt by way of article 4 of the Decree of 22 June 2005 establishing provisions guiding the adjustment of the 2005 budget.

This debit balance exists because the former Dexia Bank SA/NV pre-finances the previously allotted drawing rights that are linked to the Investment Fund for Local Authorities via a credit line. The Government of Flanders can contractually make the repayments to Dexia SA/NV no sooner than on the first banking day of the second month following the withdrawal.

The end date for standard withdrawals already lapsed a few years ago. Withdrawal of funds by local authorities remains possible, however, when the delay is due to legal problems. There is one situation (Kapelle-op-den-Bos) that remains for which a withdrawal may be made, although this has not occurred to date.

2.3 Risk management

2.3.1 Redemption timetable

Figure 15 shows the redemption timetable of the outstanding direct debt and the debt as part of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders per 31/12/2018.

Figure 15: Direct debt redemption timetable (in million euros; status as per 31/12/2018)

The idea is to build a Flemish interest rate curve that attempts to align the underlying assets with the debt issues (liabilities).

No bonds are set to mature in 2019. However, 595 million euros in debts under the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders are set to reach maturity. As expected, the first repayments have been reinvested in 2019. Moreover, in June a private placement in the amount of 50 million euros is set to reach maturity. Other than this, there are a few more limited redemptions. For instance, there are the loans assumed from the Municipal Holding (8.18 million euros) and Ostend Fish Auction (0.23 million euros). Finally, there are also capital redemptions in the amount of 8.97 million euros on the loans that were assumed from the merging municipalities. Along with the other redemptions in the amount of 6.42 million euros, this raises the total redemptions in 2019 to 73.8 million euros.

2.3.2 Fixed vs. floating debt ratio

In order to determine the fixed vs. floating interest ratio between the debt instruments used, we look solely at the debt products.

Table 15: Summary of the interest rate structure of the debt portfolio (amounts in million euros)

Instrument Structure Amount (on 31/12/2017) % Amount (on 31/12/2018) % EMTN Fixed 4,836.50 91% 5,631.50 94% Schuldschein Fixed 37.50 1% 37.50 1% Bank loans Fixed 95.16 2% 92.50 2% Other Fixed 82.46 2% 70.80 1% Municipal loans Fixed 0.00 0% 79.78 1% Total Fixed 5,051.62 95% 5,912.08 99% BCP Floating 0.00 0% 0.00 0%

Current accounts Floating 262.27 5% 76.92 1% Municipal loans Floating 0.00 0% 9.39 0% Total Floating 262.27 5% 86.31 1% 5,313.89 5,998.39

The Government of Flanders always seeks to allocate its debt portfolio with prudence. Which is why in 2018, the focus went out to (very) long-term financing operations at the best possible terms. In addition, as a result of the solid budget and cash results, the BCP programme and the current account, both at floating interest rates, have been completely run down.

In the past, it pursued a debt mix of 80% at fixed long-term interest rates and 20% at floating rates (under 1 year).

As a result of the emphasis on very long-term financing operations with fixed interest rates in 2018 and the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders which delivered a positive current account in excess of 1 billion euros by the end of 2018, the debt mix at 31 December 2018 respectively stood at 99% fixed versus 1% floating.

2.3.3 Interest sensitivity of the debt

Tables 16 and 17 show a summary of the main key figures regarding the direct debt loans taken out.

The average interest rate continued to fall in 2018 and currently stands at 1.19% (compared to 1.57% in 2017). This fall in the average interest rate is explained, among other things, by the redemption of a 750 million euro bond at a 3% coupon interest rate. The new issues were put out against coupon interest rates which were considerably lower, notably 1.5 % and 1.375%. The private placements also took place at favourable interest rates, one of which was even placed at a negative interest rate. Other than this, nearly all investments by Flemish entities were placed at a 0% interest rate as part of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders. Without the latter investments, the average interest rate would have gone down to 1.4%. These favourable rates explain the fall in the average interest rate.

The average time remaining to maturity went up by 1 month and currently stands at 12 years and 11 months. The increase in the average time remaining to maturity can also be explained by the redemption of the 750 million euro bond. On 31/12/2017, this bond only had 1 month to maturity left. Furthermore, 2 new issues were put out at 20 and 15 years and 4 private placements were made, including 1 private placement with a maturity of no less than 40 years. As approximately half of the investments (531,035 million euros) in the context of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders have a maturity of less than or equal to 1

36 year, this acts to counter the rise in the average time remaining to maturity and drives down the average. Without the latter investments, the average time remaining to maturity would have risen by 2.25 years instead of by just 1 month, as is the case now.

Table 16: Conspectus of the key figures of the direct debt by the end of 2018 (EMTN, Schuldschein and bank loans)

Average time remaining to maturity Remaining debt balance (in million EUR)* Average interest rate* * 5,850.67 1.40% 15 years and 1 months

* of the direct debt excepting the current accounts, leaseholds & Amoras

Table 17: Conspectus of the key figures of the direct debt at the end of 2018 (EMTNs, Schuldschein, bank loans and Decree on the optimisation of the management of the financial assets)

average time remaining to maturity Remaining debt balance (in million EUR)* average interest rate* * 6,896.65 1.19% 12 years and 11 months

* of the direct debt excepting the current accounts, leaseholds & Amoras

2.3.4 Hedging instruments

Today, the Government of Flanders has easy access to the capital markets. The Government of Flanders can borrow the capital to finance its direct debt in euros, for the maturity period of its choice and at the reference rate it wishes. Given its strategy of prudence, the Government of Flanders does not need to hedge currencies or interest rates.

Due to the reclassification of Diestsepoort, the Flemish Region, at the end of 2012, took over the swaps that PMV Re Vinci entered into with ING in the summer of 2008 to hedge the (future) variation in the floating base interest rate for its outstanding loans. Under these swaps, the EURIBOR rate (6 months) is swapped every six months for a fixed 4.85% interest rate - for a total sum of 40 million euros borrowed over a 20-year period.

The impact of these current rate hedges is passed on back-to-back to Diestsepoort nv so that the costs and risks remain with that company.

Of the 40 million euros, 16 million comes in the shape of a bullet loan. The remaining 24 million euros consist of capital repayments. At the end of 2018, this last swap takes into account 17.06 million euros capital. The maturity date for both swaps is 15 October 2030.

2.4 Decree to optimise the financial assets management of the entities of the Government of Flanders

On 1 October 2018, the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders took effect. This now requires institutions that belong to the consolidation scope and that comply with certain requirements (among other things owned for at least 50 percent by the Government of Flanders), to invest their excess long-term liquidities in the Flemish Community. These institutions can also choose to invest their excess short-term liquidities in the Flemish Community insofar as they are unable to find more rewarding alternatives that more or less have the same rating as Flanders. Other institutions, such as university colleges and universities or the Flemish Parliament, can enrol in the scheme on a voluntary basis. This Decree is first and foremost intended to drive down the consolidated debt position as a whole. Investing the temporary available resources of one public entity in the debt of another public entity not only drives down the consolidated debt position of the borrowing public entity, but equally of the consolidated Flemish debt as a whole. The INR (Institute of National Accounts) shall, after all, immediately deduct these invested amounts from the total Flemish debt.

Investing in Flemish paper is beneficial for both the consolidated Flemish debt as well as the investing and the lending government entities. On the one hand, the government entities are enabled to invest in financial instruments with a sustainable return and a strong rating. On the other hand, the lending government entities are able to reduce issue costs and the investor base is expanded.

In 2018, 9 Flemish entities invested 1.1 billion euros in the Flemish government. Given the short space of time (effective date was 1 October 2018) this proved to be a great success: in 3 months’ time, 1.1 billion euros was syphoned back to the Government of Flanders. The table below shows a summary of the institutions that invested in 2018, the amounts and the difference between investments in the short term (≤ 1 year) and in the long term (> 1 year).

Table 18: Investments Decree 2018 (in thousands of euros)

Amount (in thousands of Institution euros) ≤ 1 year > 1 year BAM 439,000 150,000 289,000 Gigarant 230,000 30,000 200,000 PMV 125,000 108,700 16,300 VPM 118,000 118,000 0 VMH 71,000 53,000 18,000 FWO 59,980 0 59,980 Diestse Poort 2,000 0 2,000 De Rand 1,000 1,000 0 VMSW* 70,335 70,335 0 TOTAL 1,116,315 531,035 585,280

(*) VMSW invested in 2018 via the CFU via 2 current accounts.

Given the relatively short maturity of most investments, nearly all investments were placed at a 0% interest rate10. Only 2 FWO investments, jointly representing 2.28 million euros, were placed at a positive interest rate due to their longer maturity. A 1.8 million euro investment with a maturity of 4.83 years was placed at an interest rate of 0.103%, whilst another investment in the amount of 0.48 million euros with a maturity of 5.83 years was placed at a 0.34% interest rate.

Furthermore, there are a few Flemish entities who were already investing in Flemish paper on a voluntary basis before this Decree took effect. KU Leuven (Catholic University of Leuven), Flemish Social Protection Agency and the Flemish Parliament thus own Flemish EMTN bonds. By the end of 2018, these 3 entities jointly held 32.60 million euros in “Flemish” debt in their combined portfolios (see also Table 19).

10 After all, it has been agreed that in case of a negative interest rate, the investment is to be transacted at 0%. 40

3. Consolidated debt

3.1 Overview of consolidated debt 2016-2018

The consolidated gross debt of the Government of Flanders is drawn up in accordance with the Institute of National Accounts (INR).

The consolidated gross debt can be subdivided into the following components:

 The direct debt of the Flemish Ministries;  The indirect debt of the Flemish Ministries;  The negative balance of the overall status of current accounts within the ministries of the Government of Flanders (in accordance with the cash- pooling system)  The overall balance (if negative) of the consolidated Flemish agencies within the Central Financing Unit (according to the cash-pooling system);  A correction (if negative) for non-S.1312 entities that have signed up to the CFU (currently 4 entities, i.e. UZ Gent (Ghent University Hospital), OPZ (Public Psychiatric Hospital in the town of) Rekem, OPZ (Public Psychiatric Hospital in the town of) Geel and Natuurinvest);  The financial debts of the institutions that are on the Government of Flanders' list of S.1312 institutions to be consolidated;  The debt from consolidated PPP and alternatively financed grants.

The loans taken out between entities within the consolidation scope are not included in the calculation at consolidated level. Which is why this type of loans is immediately deducted from the institutions concerned.

The “List public units” which the INR publishes on its website (April 2019 version) is used to determine which entities belong and which do not belong to the consolidation scope.

Table 19 shows the consolidated gross debt of the Government of Flanders in the period 2016-2018.

Table 19: Evolution of the consolidated gross debt of the Government of Flanders in the period 2016-2018, divided by entity (in EUR millions)

2016 2017 2018

Direct debt Fl. Comm. Min. (including negative current 4,642.12 5,313.89 5,998.39 account balance) Correction Flemish Community EMTN bonds held by Fl. -29.06 -37.95 -32.60 Comm. S.1312 entities* Fl. Comm. S.1312 entities

Ex-FRGE** 50.32 0.00 0.00 Amoras** 54.93 0.00 0.00 Agency for Integration and Civic Integration 2.26 2.08 1.88 Sports Flanders Agency 1.47 1.30 1.13 Arkimedes Fund I 49.69 0.00 0.00 BAM 136.83 120.73 104.63 Be-Dive 0.00 3.40 3.12 Flemish Waterways (Shipping Agency) 3.06 3.09 2.83 Domus Flandria 5.51 0.61 0.10 RCCs (EKMs) 590.59 595.41 568.54 EV Flanders Hydraulics*** 0.40 0.00 0.00 EV ILVO 3.52 0.14 0.00 FIT 0.60 0.00 0.00 Greenville 1.38 1.52 3.79 Het Waterschei Project 3.22 3.02 0.00 Child and Family Agency (Kind en Gezin) 0.96 0.83 0.69 Kunsthuis (Arthouse) 3.78 0.00 0.00 Lak Invest 22.60 31.49 30.72 PMV Re Vinci 5.53 5.07 4.61 Site kanaal NV 0.26 0.16 0.05 Flanders Development Site 9.78 9.34 8.89 Universities and university colleges 481.10 517.40 590.43 Ghent University Hospital ***** 50.51 0.00 0.00 VIB 5.40 4.78 4.13 VIPA 1,760.22 1,670.24 1,576.45 Vitare 42.68 0.70 0.88 VPM 30.00 30.00 0.00 VMSW 6,282.50 6,112.95 5,955.01 VVM De Lijn 171.30 151.59 180.41 VWF 2,842.66 2,705.57 2,555.08 Wandelaar Invest 67.81 61.81 55.31 Hospital infrastructure 4,963.21 4,726.93 4,430.59 AGION National Guarantee Fund 61.26 41.76 28.06 Agion (transitional period) 6.60 5.48 4.37 Agion (system from 1993) 313.30 327.46 347.65 PPP debts DBFM "Scholen van Morgen" 393.88 181.96 136.51 Brabo I 162.20 177.83 174.83 Livan I 173.60 95.89 93.57 Tongeren depots ****** 5.69 6.60 0.00

BOvZO depots****** 29.95 35.24 0.00 Via invest zaventem 57.10 55.98 54.88 R4 93.10 93.92 89.36 North South Kempen (Noord zuid kempen) 197.30 216.21 216.21 Cluster 2 depots****** 52.99 53.84 0.00 Tourism - Youth Hostels 4.71 4.71 4.71 Ostend depots****** 0.00 0.00 0.00 Total consolidated debt 23,808.83 23,332.98 23,195.23 Correction Fl. Comm. S1312 entities holding partial promissory notes from other Fl. Comm. S1312 entities in -2.4 -12.35 -11.56 their portfolio* Total consolidated debt 23,806.43 23,320.63 23,183.67

* Reported as a separate line since the 2017 KSW report

** Included in direct debt since 2017

*** No more S.1312 since 2017

**** Reported as a separate line since the 2017 KSW report ***** Since 2017, UZ Gent is free of consolidated debt ****** Since 2018, these debts are added to the debts of De Lijn cf. the INR.

The increase of the direct debt is mainly caused by the direct financing operations of VMSW, VWF and School Invest which replaces financing through guaranteed bank loans. The consequence thereof is that the consolidated debt of VMSW and VWF is falling and will continue to fall in the future.

By the end of 2018, the consolidated debt stood at 23,183.67 million euros. This is a reduction by 136.97 million euros compared to 2017. This decrease is, among other things, courtesy of the Decree on the optimisation of the management of the financial assets of the entities of the Government of Flanders (see also IV.2.4 for a further word of explanation over the Decree), which meant the Government of Flanders had to attract less outside financing. In addition, this internal financing is not factored in as part of the consolidated Flemish debt. The Decree proved to be so successful that the amount was unable to be fully used in order to further drive down the debt, which also explains the positive current account of the Flemish Community by late December. The Flemish Community is keen to make the best possible use of what is left of these resources in 2019 instead of seeking financing on the external capital markets.

The following entities also hold “Flemish” debt in their portfolio as investments (see line Correction Flemish Community EMTN bonds held by Fl. Comm. S.1312 entities), for which a correction line has been added in table above:

 KU Leuven (22 million euros);  Flemish Parliament (5 million euros);  Flemish Social Protection Agency (5.6 million euros).

Amoras and ex-FRGE have been part of the direct debt since 2017 and Eigen Vermogen Flanders Hydraulics (Equity Flanders Hydraulics) has ceased to be a Fl. Comm. S.1312 entity since 2017.

A final correction that is applied in the above table relates to the debt securities in the amount of 1.56 million euros of Lak Invest held by PMV and the Flemish

Participation Company which holds 10 million euros of the debt securities issued by Ghent University in its portfolio.

3.2 Flemish Consolidated Gross Debt INR notification APR-18

In its notification dated APR-19, the INR (= Institute of National Accounts) details a Flemish contribution to the consolidated gross debt of 18,146.43 million euros (see Table 20).

The INR reports on the debt position of the various (Belgian) governments. On the one hand, there is the consolidated gross debt. On the other hand, there is the contribution to the Maastricht debt which is lower due to inter- and intrasectoral debt corrections.

The “contribution to the Maastricht debt” concept is used as the various governments sometimes hold debt instruments of one another or of government institutions that belong to the same government or the same government sector. This is consistent with the consolidated gross debt of an entity minus the financial assets it holds of the other entities of a sub-sector (intra-sectoral consolidation) and of the government's other sub-sectors (inter-sectoral consolidation).

Table 20: Flemish consolidated debt INR notification APR-19 (status as per 31/12/2018; in million euros)

Consolidated gross debt ("Maastricht") 31/12/2018

Fl. Comm. - Consolidated gross debt 19,805.79 S1312 Maastricht debt Debts held by the Fl. Comm. issued by other S1312 entities11 1,087.37 S1312 Maastricht debt Fl. Comm. - Consolidated gross debt S1312 18,718.42 Debts held by the Fl. Comm. issued by other S13 sectors 571.99 S1312 Maastricht debt Fl. Comm. - Contribution to the consolidated gross debt 18,146.43

The major difference with the figure in this report (5,037.24 million euros) is due to the fact that:

 the INR does not factor in the “Hospital infrastructure” post in the calculation (4,430.59 million euros);  this report does not take account the held debts issued by other S.13 sectors (571.99 million euros);  this report, in respect of the S.1312 entities, concentrates purely on Flemish S.1312 entities. This means that only investments in purely Flemish S.1312 entities are posted in the accounts, whereas the INR also

11 The INR adds the debts of S1312 entities that are transacted via the X/N system to the consolidated gross debt. These entities are SchoolInvest, Diestsepoort, Flemish Community, Lakinvest, Sofico, Brussels Region and French Community. These debts are subsequently deducted by the INR in order to arrive at a consolidated gross debt S1312 . The KSW report does not factor in this debt in its consolidated debt insofar as it relates to the S.1312 entities that come within the Flemish Community’s consolidation scope. 44

takes into account, for example, investments in Walloon S.1312 entities (67.61 million euros);  the INR also factors in the long-term trade receivables in the calculation of the consolidated debt, something which the KSW report does not (-2.45 million euros);  the INR does not factor in corrections for the Fl. Comm. S.1312 entities that hold some debt securities of other Fl. Comm. S.1312 entities in their portfolio, i.e. the Flemish Participation Company which holds 10 million euros of the debt securities issued by Ghent University in its portfolio (- 10.0 million euros);  this report uses more recent and more accurate data (-20.51 million euros) (see also table 21).

Table 21: Summary of differences (in million euros)

Consolidated gross debt ("Maastricht") 31/12/2018

Fl. Comm. - Consolidated gross debt 19,805.79 Debts held by the Fl. Comm. issued by other S1312 entities 1,087.37 Fl. Comm. - Consolidated gross debt S1312 18,718.42 Debts held by the Fl. Comm. issued by other S13 sectors 571.99 Fl. Comm. - Contribution to the consolidated gross debt 18,146.43

Corrections applied to INR data for KSW report 2018

The "Hospital funding" post which is not factored in by the INR 4,430.59 Debts held that were issued by other S13 sectors 571.99 Debts held that were issued by non-Fl. Comm. S.1312 entities 67.61 Long-term trade payables that the INR counts, the KSW report 2018 does not -2.45 Correction Fl. Comm. S1312 entities which hold some debt securities in their portfolio of other Fl. Comm. S1312 entities which are not factored in by the INR -10.00 Use of more recent, more accurate data -20.51 Total corrections 5,037.24

Total consolidated debt – KSW report 2018 23,183.67

Table 22: Summary of differences INR and KSW report (use of more recent, more accurate data)

INR KSW report Difference Arteveldehogeschool (Artevelde University College) 18.89 21.11 2.22 Flemish Waterways 0.03 2.83 2.80 Elk Zijn Huis (Social housing company) 59.64 50.96 -8.68 Erasmus University College Brussels 2.45 2.54 0.09 Gemeenschapsonderwijs (GO!) (Community Education) 0.14 0.00 -0.14 Hogeschool PXL (PXL University College) 3.58 2.93 -0.65 Hypostart (Social mortgage lender) 61.51 65.02 3.51 Indomi (Social mortgage lender) 23.43 22.02 -1.41 Institute of Tropical Medicine (ITG) 9.70 10.42 0.72 Karel de Grote University College, Catholic University College 43.80 46.47 2.67 Antwerp (KdG0 SITE KANAAL - NV 0.031 0.05 0.02 SPORT Flanders (BLOSO) 1.304 1.13 -0.17 Ghent University (UGENT) 135.374 134.96 -0.41 Via North South Kempen 210.504 216.21 5.71 VIA-ZAVENTEM 54.81 54.88 0.07 Flemish Participation Company (VPM) - NV 30.00 0.00 -30.00 Flemish Public Transport Company - De Lijn 156.29 158.6712 2.38 Volkskrediet De Toren (Social mortgage lender) 55.50 55.76 0.26 Agion (Agency for Infrastructure in Education) 380.71 380.08 -0.63 Correction VWF 2555.38 2555.08 -0.3 Amoras 44.32 45.63 1.31 Rounding differences 0.12 Total difference -20.51

For its calculations, the INR uses buildings blocks which were supplied in early 2019. The KSW report uses the data reported in the annual accounts of late March 2019. As the KSW report has more recent data, differences may occur between the reported data from the INR and the data in the KSW report.

For Elk Zijn Huis, the INR added a correction line in the amount of 8.68 million euros to the debt to be able to link up matters with 2017. This is presumably an unwarranted addition as 50.96 million euros corresponds to the balance sheet amount.

For the Via Noord Zuid Kempen PPP debt, the INR had received an incomplete building block which meant 5.71 million euros went unreported by the INR.

The building block of the Flemish Participation Company had been wrongly entered, which saw the INR post 30 million euros for the Flemish Participation Company whereas in actual fact this is 0 million.

12 Table 19 refers to 180.41 million euros: 158.67 million euros + 21.74 million euros in financial leasing. 46

Tables 23 and 24 show a summary of the contributions to the consolidated gross debt (“Maastricht”) by the various Belgian governments over the 2014-2018 period.

Table 23: Contribution to the consolidated gross debt (“Maastricht”; in million euros)13

2014 2015 2016 2017 2018 Federal government & soc. security 356,901.58 364,260.38 369,543.22 373,609.91 378,281.34 Communities & Regions 48,595.61 48,843.49 57,092.78 57,098.30 58,216.75 Local authorities 24,163.00 24,072.00 23,909.00 23,401.00 23,153.00 TOTAL 429,660.19 437,175.87 450,545.00 454,109.21 459,651.09

Table 24: Contribution to the consolidated gross debt federated entities (“Maastricht”; in million euros)14

2014 2015 2016 2017 2018 Walloon Region 19,436.42 20,361.27 21,276.07 21,284.05 21,635.42 Brussels-Capital Region 4,219.11 3,893.47 3,804.79 4,126.59 4,655.63 Flemish Community 18,176.85 17,245.95 18,050.48 18,007.07 18,146.43 French-speaking Community 5,956.51 6,406.99 7,079.97 7,115.18 7,378.75 German-speaking Community 195.16 313.51 354.24 403.40 418.65 Joint Community Commission 0.00 12.36 -16.87 -42.84 -19.95 French Community Commission 197.33 196.24 194.42 193.32 192.18 Flemish Community Commission -46.53 -62.32 -79.18 -64.88 -52.26 Interregional entities 460.76 476.01 6,428.88 6,076.40 5,861.90 TOTAL 48,595.61 48,843.49 57,092.78 57,098.30 58,216.75

3.3 Evolution of the consolidated gross debt in 2019

For further information on the changes in the gross consolidated debt, please refer to the 2019 budget preparation (http://docs.vlaamsparlement.be/pfile?id=1427066) as well as the multi-year estimate (http://docs.vlaamsparlement.be/pfile?id=1431457).

13 Source: NBB (National Bank of Belgium) 14 Source: NBB (National Bank of Belgium) 47

4. Debt standard

On 18 November 2016, the Government of Flanders decided to institute a new Flemish debt standard to keep the evolution of debt under control over the years ahead. This Flemish debt standard is developed to pursue 2 objectives:

4.1 Objective 1: Maintaining a favourable rating

The Government of Flanders currently still has an Aa2 rating from Moody's as opposed to the Aa3 rating for the Federal government. The Government of Flanders is committed to preserving a favourable rating in the future. Maintaining a favourable rating will help to avoid higher interest costs compared to normal market rates. In order to secure this objective on a permanent basis, the consolidated debt - with the exception of the hospital funding - must not exceed 65% of the current revenues, in accordance with Moody's definition.

The debt ratio in 2018 was 43.62%15.

The debt ratio (compared to Belgian GDP) in 2018 stood at 4.16%.

4.2 Objective 2: A positive net assets position

A positive net assets position means that the total value of marketable assets is greater than the consolidated debt excluding the hospital funding.

In late 201716, the Government of Flanders had net assets in the amount of 4.2 billion euros. In other words, the increase of the assets exceeds the increase of the consolidated debt (excl. hospital funding) as the net assets position amounted to just 2.8 billion euros at the end of 2016.

The 2018 and 2019 budgets contain 3 major factors that will have an impact on the net assets position, but do not act to imperil this position, given the current margin. These are: the settlement of the Special Finance Act in 2018, the assumption of the debt of the municipalities as part of the voluntary mergers in 2018 and the ESA correction for the hospitals in 2018 and 2019. In addition, the settlement of the autonomy factor in terms of cash disbursements is spread across 16 years which means this effect is manifesting itself step by step.

15 (Consolidated debt – hospital funding) / ESA revenues 2018. The ESA revenues 2018 (42,992.64 million euros) are a provisional figure. 16 No figures on the 2018 the net assets position are currently available. These figures are to be published in the autumn of 2019. 48

5. Public-Private Partnerships

The Public Private Partnerships are extensively reported by the PPP Knowledge Centre. Further information on the alternative financing of the Government of Flanders' investments is available from: https://www.vlaamsparlement.be/parlementaire-documenten/Parliamentaire- initiatieven/1286327

V. GUARANTEE MANAGEMENT IN 2018

1. Overview

Table 25: Summary of outstanding guarantees (in million euros; 31/12/2018)

2014 2015 2016 2017 2018 Guarantees to (local) authorities 807.75 740.41 635.05 486.35 338.98338.98 Flemish Water Supply Company 160.81 193.27 200.15 187.02 159.90 EVA Flemish Public Transport Company De Lijn 82.75 64.36 48.50 35.02 24.09 Universities (social sector) 15.70 11.94 8.21 4.50 3.78 Ghent University Hospital 54.43 52.52 50.51 48.40 46.18 EVA Syntra Vlaanderen 1.15 0.85 0.65 0.44 0.23 City of Antwerp 393.75 307.25 213.19 110.91 0.00 City of Sint-Niklaas - Cross Border Lease (*) 50.12 55.71 57.54 50.58 52.97 City of Dendermonde - Cross Border Lease (*) 31.97 35.54 36.70 32.26 33.79 Municipality of Hamme - Cross Border Lease (*) 17.07 18.97 19.60 17.22 18.04 Guarantees covered by assets 10,993.88 11,675.99 11,982.27 11,916.99 11,533.02 Social Housing 673.32 691.48 669.40 686.00 710.00 Domus Flandria 39.15 16.75 3.73 0.00 0.00 EVA VMSW (Flemish Social Housing Company) 4,260.92 4,704.90 4,523.43 4,340.23 4,149.91 Flemish Housing Fund cvba 3,025.88 3,005.41 2,843.00 2,697.25 2,547.00 IVA AGIOn (Agency for Infrastructure in Education) 269.08 292.42 319.88 329.90 352.02 IVA VIPA (Flemish Infrastructure Fund for Person-related Matters) 2,372.95 2,423.00 2,377.26 2,321.26 2,188.00 Beheersmaatschappij Antwerpen Mobiel NV 168.40 152.42 136.38 120.34 104.19 Project Brabo 1 NV 110.23 109.18 119.69 118.30 116.20 Scholen van Morgen 10.48 171.83 828.41 1,142.62 1,204.61 Deurganckdoksluis 63.47 108.60 161.09 161.09 161.09 Economic guarantees 932.29 974.38 977.95 985.66 977.46 Waarborgbeheer nv 546.63 553.23 595.20 655.14 707.94 Gigarant nv 175.54 223.40 192.33 205.59 222.89 FIVA (Financing Instrument for the Flemish Fisheries and Aquiculture Sectors) 0.26 0.00 0.00 0.00 0.00 VLIF (Flemish Agricultural Investment Fund) 46.26 38.16 28.27 22.33 17.62 VIB (Flemish Institute for biotechnology) 4.47 4.05 3.62 3.17 2.70 IMEC 36.25 32.25 37.47 31.93 26.31 Arkimedes Fund 120.53 116.90 118.83 67.50 0.00 iMinds (**) 0.00 4.00 0.00 0.00 0.00 Constructiewerkhuizen G. Van Weynsberghe & Co NV 2.23 2.23 2.23 0.00 0.00 DAB Waarborgfonds Microfinancing 0.12 0.12 0.00 0.00 0.00 Rest 0.07 0.02 0.00 0.00 0.00 De Gezinsbond VZW 0.07 0.02 0.00 0.00 0.00 TOTAL 12,733.99 13,390.80 13,595.27 13,389.00 12,849.46 (*) EUR/USD exchange rate 31/12/2018: 1.1450 (**) iMinds merged with IMEC in 2016

This table provides an overview of the debt guaranteed by the Flemish Community/the Flemish Region. The total guaranteed debt at the end of 2018 was 12.9 billion euros, a decrease of 539.5 million euros compared to 2017

(13.389 billion euros). The guaranteed debt is also expected to fall further in the coming years.

In 2018, the guaranteed debt of Scholen van Morgen (Schools of Tomorrow) grew by 61.99 million euros. This increase is more limited than in 2017 when we witnessed a 314.21 million euro rise, to reach a total of 1,142.62 million euros in guaranteed debts. This is no more than logical given that most school buildings that are part of this project had already been completed and delivered in 2017. In addition, we saw a fall in the guaranteed debt of VMSW (-190 million euros) and VWF (-150 million euros) as these entities have no longer been taking out guaranteed loans with banks or insurance companies themselves, since they started being directly financed by the Flemish Region in mid-2015. Furthermore, the guaranteed debt of VIPA fell by 133 million euros and the guaranteed loans of the City of Antwerp, which still amounted to 110.91 million euros in 2017, were fully redeemed in 2018. Finally, Arkimedes was dissolved and liquidated, which reduced the Fund’s guaranteed debt to 0 (-67.5 million euros).

Since a large part of the guaranteed debt is already included in the consolidated debt, the total guaranteed debt was divided into 'consolidated guaranteed debt' on the one hand and 'non-consolidated guaranteed debt' on the other hand. As table 26 shows, 11 billion euros of the guaranteed debt has already been included in the consolidated debt. Which leaves only a limited portion, i.e. 1.850 billion euros (see Table 27) which may be considered purely as guaranteed debt. The bulk of this, 0.97 billion euros, is classified in the sector of economic guarantees. The non-consolidated debt also fell slightly.

Table 26: Consolidated guaranteed debt (in million euros; status as per 31/12/2018)

2014 2015 2016 2017 2018 Guarantees to (local) authorities 152.88 128.82 107.22 87.92 74.05 EVA Flemish Public Transport Company De Lijn 82.75 64.36 48.50 35.02 24.09 Universities (social sector) 15.70 11.94 8.21 4.50 3.78 Ghent University Hospital 54.43 52.52 50.51 48.40 48.40 Guarantees covered by assets 10,317.46 10,990.94 11,288.92 11,265.64 10,923.22 Social Housing 673.32 691.48 669.40 686.00 710.00 Domus Flandria 39.15 16.75 3.73 0.00 0.00 EVA VMSW (Flemish Social Housing Company) 4,260.92 4,704.90 4,523.43 4,340.23 4,149.91 Flemish Housing Fund cvba 3,025.88 3,005.41 2,843.00 2,697.25 2,547.00 IVA AGIOn (Agency for Infrastructure in Education) 269.08 292.42 319.88 329.90 352.02 IVA VIPA (Flemish Infrastructure Fund for Person- related Matters) 1,760.00 1,846.55 1,845.00 1,831.00 1,739.29 Beheersmaatschappij Antwerpen Mobiel NV 168.40 152.42 136.38 120.34 104.19 Project Brabo 1 NV 110.23 109.18 119.69 118.30 116.20 Scholen van Morgen 10.48 171.83 828.41 1,142.62 1,204.61 Economic guarantees 52.19 56.05 53.31 3.17 2.70 VIB (Flemish Institute for Biotechnology) 4.47 4.05 3.62 3.17 2.70 Arkimedes Fund 47.72 48.00 49.69 0.00 0.00 iMinds (*) 0.00 4.00 0.00 0.00 0.00 TOTAL 10,522.53 11,175.81 11,449.45 11,356.73 10,999.97 * iMinds merged with IMEC in 2016

Table 27: Non-consolidated guaranteed debt (in million euros; status as per 31/12/2018)

2014 2015 2016 2017 2018 Guarantees to (local) authorities 654.87 611.59 527.83 398.43 264.70 De Watergroep 160.81 193.27 200.15 187.02 159.90 The City of Antwerp 393.75 307.25 213.19 110.91 0.00 City of Sint-Niklaas - Cross Border Lease (*) 50.12 55.71 57.54 50.58 52.97 City of Dendermonde - Cross Border Lease (*) 31.97 35.54 36.70 32.26 33.79 Municipality of Hamme - Cross Border Lease (*) 17.07 18.97 19.60 17.22 18.04 EVA Syntra Flanders 1.15 0.85 0.65 0.44 0.00

Guarantees covered by assets 676.42 685.05 693.35 651.35 610.25 Deurganckdoksluis 63.47 108.60 161.09 161.09 161.09 IVA VIPA (Flemish Infrastructure Fund for Person-related Matters) 612.95 576.45 532.26 490.26 449.16 Economic guarantees 880.10 918.29 924.64 982.49 974.76 IMEC 36.25 32.25 37.47 31.93 26.31 Waarborgbeheer nv 546.63 553.23 595.20 655.14 707.94 Gigarant nv 175.54 223.40 192.33 205.59 222.89 FIVA (Financing Instrument for the Flemish Fisheries and Aquiculture Sectors) 0.26 0.00 0.00 0.00 0.00 VLIF (Flemish Agricultural Investment Fund) 46.26 38.16 28.27 22.33 17.62 DAB Waarborgfonds Microfinancing 0.12 0.12 0.00 0.00 0.00 Constructiewerkhuizen G. Van Weynsberghe & Co NV 2.23 2.23 2.23 0.00 0.00 Arkimedes Fund 72.81 68.90 69.14 67.50 0.00 Rest 0.07 0.02 0.00 0.00 0.00 De Gezinsbond VZW 0.07 0.02 0.00 0.00 0.00 TOTAL 2,211.46 2,214.95 2,145.82 2,032.27 1,849.71

(*) EUR/USD exchange rate 31/12/2018: 1.1450

2. The risk is limited

The executions in 2018 amounted to less than 0.5%17 (see also below) of the total outstanding guarantees and were mainly held by the Arkimedes Fund, which found itself dealing with 44.2 million euros in executions. Furthermore, NV Waarborgbeheer was also confronted with 12.75 million euros in executions. The annual budgets contain provisions for the expected executions, based on standardised provision of guarantees.

Since it is not always easy for Flemish companies to obtain credit from a bank, even with a good track record, PMV established two companies: Waarborgbeheer NV and Gigarant NV. The task of both companies is to grant guarantees. Guarantees reduce the risk for banks and create more credit facilities for companies.

Guarantees are sometimes enforced even after careful screening by Waarborgbeheer NV and Gigarant NV; this was only the case for NV Waarborgbeheer in 2018.

The other executions occurred at VLIF and AGION, although these were minimal (0.27 million euros and 0.15 million euros respectively). In other words, executions occurred in 2018 almost exclusively in the economic guarantees sector, which represents just 8% of the total Flemish guaranteed debt. The largest portion of guaranteed debt (90%) is covered by assets (see figure below).

Figure 16: Share of the various categories in the guaranteed debt at the end of 2018

The conclusion is that in 2018 the guaranteed debt continued to fall compared to 2017. In practice, the executions in 2018 were limited to the economic guarantees sector. As this sector accounts for only a limited portion of the total guaranteed debt, the executions were comparatively very low which

17 57,37 million euros in executions in 2018 53 consequently makes the risk equally low. The total amount in executions was higher in 2018 than in 2017 (see also below).

2.1 Executions and recoveries

The executions in 2018 amounted to 57.37 million euros, compared to 10.6 million euros in 2017.

In 2018, the Arkimedes Fund was dissolved and liquidated. This caused the guaranteed debt to fall, although it did require 44.2 million euros in executions to be paid on a once-only basis. As NV Waarborgbeheer in 2018 managed to make a total of 9.9 million euros in recoveries and in addition 5.8 million euros guarantee premiums were paid , this was more than enough to offset the executions in the amount of 12.75 million euros. All of which means NV Waarborgbeheer is looking at a positive balance in the amount of 2.9 million euros. In most other sectors too, the guarantee premiums received were more than sufficient to cover the executions – recoveries. For all categories combined, 2018 showed a negative balance in the amount of 37.2 million euros. Without the once-only executions of the Arkimedes Fund, there would have been a positive balance in the amount of 7.0 million euros in 2018.

The guarantee premiums, executions and recoveries are clarified in greater detail in the table below.

Table 28: Summary of the cost of the guarantees (in million euros)

Premiums Executions Recoveries Balance 2017 2018 2017 2018 2017 2018 2017 2018 Social housing (EKMs) 0.2 0.2 0.0 0.0 0.0 0.0 0.2 0.2 AGION 0.4 0.3 0.1 0.2 0.1 0.0 0.4 0.2 VLIF 0.0 0.0 0.5 0.3 0.0 0.0 -0.5 -0.3 Waarborgbeheer NV 5.6 5.8 10.0 12.8 8.7 9.9 4.3 2.9 VIPA 0.5 0.0 0.0 0.0 0.0 0.0 0.5 0.0 Gigarant NV 3.6 4.0 0.0 0.0 0.0 0.0 3.6 4.0 Arkimedes Fund I 0.0 0.0 0.0 44.2 0.0 0.0 0.0 -44.2 TOTAL 10.2 10.3 10.6 57.4 8.9 9.9 8.5 -37.2

3. A few important components

3.1 Guarantees to (local) authorities

In 2018, the City of Antwerp fully paid off the remaining portion of its guaranteed debt (110.91 million euros).

Although De Watergroep is a company, it is classified under guarantees to local and other authorities. De Watergroep is the largest drinking water company in Flanders. It is owned by the local authorities and the Government of Flanders. This is why the debt guaranteed by the Flemish Community is found under guarantees to local and other authorities. In 2018, De Watergroep took out a 15 million euro guaranteed loan. It also redeemed a number of Flemish-region guaranteed loans early in 2018, which has reduced the total guaranteed debt of De Watergroep

At the end of 2018, the guaranteed debt of the cross border leases of Sint- Niklaas, Dendermonde and Hamme was higher than at the end of 2017, but this is strictly due to lower exchange rates (EUR/USD).

3.2 Social Housing

As a result of the direct financing of the VMSW and the VWF (since mid-2015), the guaranteed debt of the social housing sector, of which the VMSW and the VWF are the main players, continued to decrease in 2018.

The Recognised Credit Companies (RCCs) continue to be financed by means of guaranteed bank loans. In the case of the RCCs, both the liabilities side (funding of RCC) and the asset side (loans granted by RCCs to private citizens) are guaranteed. The asset side is, however, guaranteed for no more than 20%.

The table below shows more details of the guaranteed loans granted in the social housing sector.

Table 29: Total guarantees granted in the social housing sector (in million euros)

Social housing sector 2014 2015 2016 2017 2018 Social Housing From RCC to private individuals (*) 130 145 125 130 125 Funding of RCC (*) 543 546 544 556 585 VMSW 4,261 4,705 4,523 4,340 4,150 VWF 3,026 3,005 2,843 2,697 2,547 Total new calculation 7,960 8,402 8,036 7,724 7,407 (*) Estimate

3.3 VIPA

Table 30 shows that the guaranteed debt of VIPA decreased to 2,188 million euros (compared to 2,321 million euros in 2017).

Table 30: Breakdown of VIPA section into conventional, alternative and facilitating guarantees (in million euros)

2016 2017 2018 Classic guarantee 533 490 449 Alternative guarantee 1,807 1,721 1,630 Facilitating guarantee 38 110 110 TOTAL 2,377 2,321 2,188

Welfare and Health Services can turn to VIPA for a grant for their infrastructure work subject to certain conditions. Certain sectors may also request a guarantee for their external financing, subject to strict and selective conditions.

VIPA has built a buffer with the paid guarantee premiums. So if a guarantee is requested in the future, this can be covered without any problem.

In addition, VIPA has concluded a pari passu agreement with all financial institutions involved. This agreement stipulates that if a regional guarantee is attached to a loan, all of the bank’s securities vis-à-vis the recipient of the guarantee shall be shared evenly with the VIPA.

As part of the move towards delivering the investment support offered to residential care centres and hospitals on an all-in / flat rate basis, no further "Alternative Guarantees" are being granted. As such, this post is set to continue to decline in the future.

The sharp rise in the “Facilitating Guarantee” post in 2017 is the result of loans that were already guaranteed prior to 2017 under an in-principle agreement, of which the guarantee position could only be included in 2017 as it was not until 2017 when the withdrawal period of these loans had expired, and the redemption tables could be provided.

The withdrawal period of the last loan under the facilitating guarantee ends in 2019, so the facilitating guarantee will decline year after year from 2020 onwards. All the more so as no further new agreements for the facilitating guarantee will be granted.

3.4 Scholen van Morgen (Schools of Tomorrow)

The Scholen van Morgen (Schools of Tomorrow) project is a Public Private Partnership (PPP) for the construction of schools in the amount of 1.5 billion euros. The programme consists of 182 concrete projects, of which 158 projects had already been commissioned by the end of 2018, 7 projects were still in the construction phase and 17 projects in the design stage.

The guarantee for the construction loan and the non-subsidised part of the availability fee takes effect after the handover. The guarantee is offset by the mortgage mandates of the availability fee and the construction loan.

3.5 Guarantees to large, medium-sized and small companies

Flanders supports the financing of companies through two subsidiaries of Flanders Holding Company (PMV): Waarborgbeheer nv and Gigarant nv. Guarantees up to 1.5 million euros come under the generic guarantee scheme of Waarborgbeheer NV. For guarantees in excess of this amount, it is Gigarant nv that provides the guarantee.

Waarborgbeheer NV offers guarantees up to 1.5 million euros for a maximum of 75% of the loan. The guarantee scheme is subject to the European rules for minimum support. Waarborgbeheer nv works closely with the banks for this purpose, within the terms of well-defined agreements. For instance, a bank may decide to bring a loan of up to 750,000 euros, which comes within its authorised budget and terms, under the guarantee scheme. For risks in excess of 750,000 euros, the loan is also assessed by Waarborgbeheer NV and the guarantee has to be approved by the Flemish minister for the Economy. The endorsing business pays a guarantee premium before the guarantee takes effect. The premium is calculated in consideration of the amount and the term of the guarantee. In the event of execution, the recovered amounts will be divided pari passu between Waarborgbeheer nv and the lending bank.

Gigarant NV offers guarantees in excess of 1.5 million euros to large companies and SMEs for a maximum of 80% of the loan. The financial institutions on behalf of which a Gigarant guarantee is issued must also assume part of the risk of the financing. Gigarant NV always shares on a pro-rated basis in the other securities that the financial institution offers for the loan in question. The company must pay an annual premium, payable in advance for the next 12 months, as long as the guarantee is in place. It also needs to make arrangements in the area of employment. The maximum term of the guarantee is 8 years. Provided the regulatory requirements are duly met, after a thorough screening of the application, Gigarant NV may offer a guarantee of up to 10 million euros. Guarantees in excess of this amount require the approval of the Government of Flanders at all times.

VI. RATING OF THE FLEMISH COMMUNITY/REGION

In the financial industry, the concept of “rating” refers to the outcome of an evaluation of creditworthiness. Ratings are widely used by investors in the capital market as an indication of the financial stability of a (potential) borrower. The rating provides lenders with an indication of the certainty that the borrower will be able to meet its commitments in full and on time. The rating level also serves as a guideline for the risk premium to be included in the yield; the higher the rating, the lower the cost.

The contract with S&P and Fitch which ended on 29 February 2016 was put out to tender again. In part to clamp down on the price, just one rating agency was selected in the end: Moody’s which came out best in the public tender. The benchmark issues of 2016, 2017 and 2018 moreover also showed that having 1 rating suffices. The current contract with Moody's runs from 1 March 2016 to 29 February 2020.

In November 2017, Moody’s carried out additional investigations into the future Oosterweel project. At the time, the rating was confirmed as Aa2. In September 2018, Moody’s reconfirmed the rating for Flanders at Aa2. That is the highest rating of all Belgian regions and communities and is even 1 notch higher than the Federal government, which has Aa3. This is a rather unique situation: Flanders is 1 of the 5 regions in Europe with a rating that is higher than that of the sovereign state. The other regions are the Basque Country, Lombardy, the autonomous province of Trentino and the autonomous province of Bolzano.

Table 31: Summary of 2017 and 2018 ratings for Flanders

Rating agency Date: Rating Moody's 15/09/2017 Confirmation of Aa2 rating, outlook stable Moody's 10/11/2017 Confirmation of Aa2 rating, outlook stable Moody's 28/09/2018 Confirmation of Aa2 rating, outlook stable

Moody’s latest rating report highlights some of Flanders’ strong suits that have prompted the agency to award the (excellent) Aa2 rating:

 Strong reputation in the area of budget discipline and unrelenting efforts to ensure budget consolidation;  Modest debt burden and broad access to liquidities;  Strong and diversified economic base.

For all the above, Flanders also faces a few challenges:

 There is a recent shift in the debt management strategy which implies an increase in the direct debt burden, albeit on a low base;  Large-scale infrastructure project (Oosterweel Link) which comes with implementation and development risks.

VII. APPENDICES

1. Glossary

Average interest rate

The average interest rate is calculated in accordance with the interest rate base, act/act annual, by taking the weighted average of the individual interest rates in accordance with the remaining debt balance (RDB).

Average interest rate = Sum ( t(i) x RSS(i) ) / sum of the RSS t(i) is the interest rate of the next due date of each product

Average time remaining to maturity

For the average time remaining to maturity, the weighted average is calculated of the remaining number of days until the end date of each redemption of the capital of each loan, taking into account the number of redemptions until the end date.

Belgian Commercial Paper

The “Belgian Commercial Paper Programme” (= BCP) of the Flemish Community is a short-term financing instrument. The maturity varies from 1 day to 1 year. Under the programme, the Flemish government is able to issue treasury certificates, in material form, up to a total amount of 1 500 000 000 euros maximum.

Capital market

Market in which medium-term and long-term financial instruments are traded.

Consolidated debt

Sum of the debts of all entities that come within the Flemish government’s consolidation scopes, with the reciprocal debts smoothed out.

DAB

Separate Management Service (Dienst Afzonderlijk Beheer)

Direct debt

A debt category which encapsulates the financial instruments (loans, securities, leasing, cash facility, etc.), either issued or taken out by the Flemish Community or the Flemish Region, or assumed by the Flemish Community of the Flemish Region under the terms of contracts.

EMTN

EMTN stands for European Medium Term Notes. Through the EMTN programme, the Flemish government is able to issue debt instruments on the international financial markets for a maximum outstanding amount, currently 10 billion euros, and raise the financial resources it requires.

EURIBOR

EURopean InterBank Offered Rate of the interest rate against which parties can borrow money on the interbank market in Europe.

Financial Market

Capital market plus money market.

Guaranteed debt

The aggregate debt of legal entities under public law, established by or pursuant to a law or Decree and falling under the aegis of the Flemish Community or the Flemish Region, and of lower authorities, the outstanding capital of which is fully or partially guaranteed by the Flemish Community or the Flemish Region, either by way of a statement of guarantee or by means of a contractual commitment, excluding the indirect debt.

Indirect debt

The indirect debt is debt that was taken out not by the Flemish Community or the Flemish Region themselves, but by one of their agencies or public institutions, whilst the financial costs are defrayed by the Community or the Region.

Loan at a fixed rate of interest

Loan with an interest rate that remains unchanged until its expiry date.

Loan at a floating rate of interest

Medium-term or long-term loan with an interest rate that varies according to changes in a reference rate, which is usually the interest rate of the interbank market. The coupon is usually set to 6-month intervals. The interbank rate may optionally include the addition of a fixed margin or 'spread'. This margin may be deducted from the interbank interest rate for very good debtors.

Margin

A generally fixed margin that is either added to or deducted from an interest rate that is used as a reference for a loan with a variable interest rate.

Money market

Market in which financial transactions with a maximum term of one year are concluded.

Net Financing Requirements

The sum of the balance of the current transactions, the capital transactions and the treasury transactions. This balance is referred to as "net" as the redemptions of the debt are not included in the above-mentioned transactions. The actual interest charges over public debt on the other hand are included the Net Financing Requirements. In theory, the net financing requirements are commensurate with the increase in public debt. In practice, there are various other causes of changes in public debt (e.g. exchange rate differences or the assumption of certain debts).

OLO

(Obligation) Linear bond: a long-term bond issued by the Federal Administration of the Treasury that has a fixed interest rate, term, and redemption value. These bonds are dematerialised.

Rating

Practice that assesses the creditworthiness of a debtor. The best-known rating agencies are Standard & Poor’s, Moody’s and Fitch. They make regular assessments of the financial capacity of the Flemish Community.

Redemption

Every repayment that reduces or extinguishes a debt.

Refinancing

Repayment of a loan by taking out a new loan.

Remaining term to maturity

The remaining term to maturity is calculated in accordance with the end date and today’s date, i.e. the remaining length of time until the debt has been extinguished. The average of these remaining terms to maturity in accordance with the remaining debt balance is the remaining term to maturity.

Schuldschein

A schuldschein is a loan agreement, not a security, whereby the borrower promises to repay a certain sum to the lender on a certain date for a specific fee. It is governed by German law, but its legal documentation is in line with the EMTN or the OLOs. It is exempted by that same German law from the obligation to book the loan at market value (mark-to-market), by which this lending instrument offers advantages in particular to German investors.

Short-term debt

Debt with a maximum term of 1 year, whereby the proceeds of the loans are deposited in the resource budget. This debt may be repaid via contractual instalments in the form of annual allocations, credits for which are provided in the budget (Title 3).

Short-term debt

Debt in securities with a maximum term of one year. Short-term debts are entered into in order to bridge temporary treasury deficits.

Swap

Financial transaction whereby two parties undertake to exchange equal yet opposite financial obligations over a certain length of time. For the Government of Flanders a swap can apply to the interest rate, the currency or both. This is what we respectively call an interest-rate swap, a currency swap and a cross- swap.

Tender

System for placing issues whereby the prospective subscribers propose an issue price or an interest rate, taking into account the fact that all other terms and

62 conditions of the loan have been defined. All tenders are ranked according to the interest rate or the prices proposed.

Treasury bills

Short-term securities issued on the primary market by the Federal Treasury by way of tendering procedures. There are three types of certificates: three-month, six-month, and twelve-month certificates. A secondary market for treasury certificates also exists. This market rests with the primary dealers, who ensure an effective and transparent market process as well as market liquidity. From the time the treasury certificates are entered into the X/N clearing system of the National Bank, anyone may subscribe to them (residents and non-residents, institutional investors, private individuals, etc.).

2. List of websites

http://financeflanders.be/ http://fin.vlaanderen.be http://www.vlaanderen.be/nl/publicaties http://www.serv.be/serv http://regionalestatistieken.vlaanderen.be/svr-publicaties http://www.pmv.eu/ http://www.pmv.eu/nl/financiering-voor-ondernemers/waarborgen/waarborgen- tot-15-miljoen-euro http://www.pmv.eu/nl/financiering-voor-ondernemers/waarborgen/waarborgen- boven-15-miljoen-euro http://www.vmsw.be http://www.vlaamswoningfonds.be/ http://www.vlaamswelzijnsverbond.be/intersectoraal/financieel- policy/infrastructure/vipa https://www.dewatergroep.be/ http://begrippendatabank.fenb.be/Begrippendatabank/default.aspx https://www.nbb.be/nl/statistieken/overheidsfinancien/methodologie https://www.vlaamsparlement.be/parlementaire-documenten/Parliamentaire- initiatieven/1286327