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.
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|
|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|
|Total interest-bearing liabilities||9 668|
|Interest-bearing assets||1 612|
|Net interest-bearing liabilities||8 056|
|Unutilised long-term credit facilities||8 975|
Orkla has no official credit rating, but actively monitors quantitative and qualitative measures which affect the creditworthiness of the Group.