debt facility

The long term borrowings on our balance sheet are related to a syndicated revolving credit facility. This allows us to consciously avoid the risk of having to refinance short-term bridge financing as well as having to issue equity in a secondary public offer. We finance against floating interest rates since in an economic downturn, when our earnings may be under pressure, interest rates will normally tend downwards. Floating interest rates are considered a natural hedge against the development in operational results. So far, this has paid off significantly, as over time floating interest rates are on average significantly lower than fixed interest rates.

In Q2 2014 we took advantage of the favorable market conditions and our aim to have sufficient long-term committed financing in place, by amending and extending the existing multi-currency credit facility.

Our net debt position (including lease liabilities) decreased by € 263 million to € 1,377 million. Free cash flow of € 915 million (up € 288 million compared to  2018) outweighed our cash outflow, mainly with regard to dividends paid (€ 632 million). The leverage ratio (net debt divided by 12-month EBITDA) was 1.0 at year-end.

As at December 31, 2019, the Group has a € 1,850 million (2018: € 1,850 million) committed multi-currency syndicated revolving credit facility at its disposal, which matures in July 2024 (2018: July 2023). In 2019, the maturity term of this multi-currency syndicated revolving credit facility was extended by one year to July 2024; as of July 2023, the amount at the disposal of the Group will change from € 1,850 million to € 1,778 million. The facility agreement contains a covenant with respect to the net debt to EBITDA ratio (leverage ratio), as well as a paragraph on material adverse changes; the net debt to EBITDA ratio has a limit of 3.5, and is calculated based on the results of the Group on a 12-month basis. In certain cases, Randstad is allowed to report a leverage ratio of 4.25x EBITDA for a limited period of time. This credit facility has an interest rate that is based each time on the term of the drawings, increased by a margin above the applicable Euribor or LIBOR rates. The margin is variable and depends on the 'net debt to EBITDA' ratio.

The Group also has at its disposal a promissory note of € 150 million, ultimately maturing in December 2020, which bears an interest that is based on 6-month Euribor (with a floor of zero) increased by a fixed margin of 0.45% per annum, payable in June and December of each year. In addition, the Group holds two loans of USD 200 million each. Both loans ultimately mature in October 2020, and have floating interest conditions that are based on 1-month LIBOR (with a floor of zero), increased by a variable margin that depends on the net debt to EBITDA ratio. Covenants of the promissory note and the loans are fully aligned with the committed multicurrency syndicated revolving credit facility.

The net debt position (including lease liabilities) as of year-end 2019 was € 1,377 million, compared to € 1,640 million at year-end 2018 (restated for IFRS 16).