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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 31.12.16, debt secured by pledges amounted to NOK 95 million, whereas the book value of pledged assets was NOK 167 million. The Group’s total guarantee commitments amounted to NOK 168 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 31.12.16 is shown below.

NOK million Book value 31.12.16 Currency Notional in ccy Coupon Term Listed
Bonds            
ORK10 (ISIN NO 001 036492.0) 702 NOK 1 200 Fast 5,70% 2007/2017 Oslo Stock Exchange
ORK09 (ISIN NO 001 036491.2) 213 NOK 1 300 Nibor + 0,42% 2007/2017 Oslo Stock Exchange
ORK80 (ISIN NO 001 069468.0) 972 NOK 1 000 Fast 4,35% 2013/2024 Oslo Stock Exchange
ORK82 (ISIN NO 001 173173.0) 757 NOK 1 500 Nibor + 0,69% 2015/2022 Oslo Stock Exchange
ORK83 (ISIN NO 001 177438.3) 399   1 000 Nibor + 0,85% 2016/2023 Oslo Stock Exchange
ORK84 (ISIN NO 001 177439.1) 187   1 000 Fast 2,35% 2016/2026 Oslo Stock Exchange
US Private Placement 1 330 USD 150 Fast 6,09% 2007/2017  
US Private Placement 483 GBP 40 Fast 6,27% 2007/2019  
US Private Placement 670 USD 70 Fast 6,19% 2007/2019  
Other Private Placement 36          
Total bonds 5 749          
Bank loans 3 739          
Other loans 180          
Total interest-bearing liabilities 9 668          
Interest-bearing assets 1 612          
Net interest-bearing liabilities 8 056          
             
Unutilised long-term credit facilities 8 975          

Credit rating

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