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Financing overview

Sources of financing

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.

Covenants

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 31.12.14, debt secured by pledges amounted to NOK 296 million, whereas the book value of pledged assets was NOK 501 million. The Group’s total guarantee commitments amounted to NOK 60 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 31.12.14 is shown below.

NOK million Book value
31.12.14
Currency Notional in Coupon Term Listed
Bonds            
ORK10 
(ISIN NO 001 036492.0)
1 203 NOK 1 200 Fast 
5,70 %
2007/
2017
Oslo Stock Exchange
ORK09 
(ISIN NO 001 036491.2)
1 299 NOK 1 300 Nibor 
+ 0,42 %
2007/
2017
Oslo Stock Exchange
ORK11 
(ISIN NO 001 069468.0)
668 NOK 1 000 Fast 
4,35 %
2007/
2017
Oslo Stock Exchange
US Private Placement 2 423 USD/
GBP
220/40 Fast 
6,09-
6,27 %
2007/
2017-
2019
 
Total bonds 5 593  
Bank loans 3 165
Other loans 350
Total interest-bearing liabilities 9 108
Interest-bearing assets 3 447
Net interest-bearing liabilities 5 661
Unutilised long-term credit facilities 7 423

Credit rating

Orkla has no official credit rating, but actively monitors quantitative and qualitative measures which affect the creditworthiness of the Group.