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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 31.12.15, debt secured by pledges amounted to NOK 218 million, whereas the book value of pledged assets was NOK 497 million. The Group’s total guarantee commitments amounted to NOK 66 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 31.12.15 is shown below.

NOK million Book value 
31.12.15
Currency Notional in Coupon  Term Listed
Bonds            
ORK10 
(ISIN NO 001 036492.0)
964 NOK 1 200 Fixed 
5.70%
2007/
2017
Oslo 
Stock
Exchange
ORK09 
(ISIN NO 001 036491.2)
519 NOK 1 300 Nibor 
+ 0.42%
2007/
2017
Oslo 
Stock
Exchange
ORK80 
(ISIN NO 001 069468.0)
788 NOK 1 000 Fixed 
4.35%
2013/
2024
Oslo 
Stock
Exchange
ORK82 
(ISIN NO 001 173173.0)
659 NOK 1 500 Nibor 
+ 0.69%
2015/
2022
Oslo 
Stock
Exchange
US Private Placement 2 741 USD/
GBP
 220/40  Fixed 
6.09-
6.27%
2007/
2017-
2019
 
Other Private Placement 27          
Total bonds 5 698          
Bank loans 2 847          
Other loans 576          
Total interest-bearing liabilities 9 121          
Interest-bearing assets 1 316          
Net interest-bearing liabilities 7 805          
Unutilised long-term credit facilities 8 374          

Credit rating

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