The Group uses several sources of long-term loan capital, whereof banks and bond markets are the most important. External borrowing is centralised at parent level, and capital needs in subsidiaries are mainly covered by internal loans, or equity. Capital structure in subsidiaries is adapted to commercial, as well as legal and tax considerations. The short term liquidity of Group companies is managed at Group level through cash pools.
Orkla’s main sources of financing are bilateral loans from Orkla’s relationship banks and loans in the Norwegian bond market. Funds have also been raised in the US Private Placement market. The Group Treasury also continuously assesses other funding sources. The term to maturity for new loans and credit facilities is normally 5–10 years.
Orkla has no loan agreements with financial covenants for the Group or for Orkla ASA. The loan agreements include some limitations on disposals of businesses, creation of security interest on assets (Negative Pledge), borrowing at subsidiary level, and cross default clauses. As of 31.12.13, debt secured by pledges amounted to NOK 293 million, whereas the book value of pledged assets was NOK 840 million. The Group’s total guarantee commitments amounted to NOK 182 million. Bonds issued in the Norwegian bond market are listed on the Oslo Stock Exchange.
An overview of net interest bearing debt and debt maturity profile as of 31.12.13 is shown below.
Orkla has no official credit rating, but actively monitors quantitative and qualitative measures which affect the creditworthiness of the Group.