Financing overview

Funding sources

The Group uses several sources of long-term loan capital, whereof banks and bond markets are the most important. External borrowing is centralised at the parent company 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 raised in the US Private Placement market were repaid during 2017. The Group Treasury also continuously evaluates other funding sources. The term to maturity for new loans and credit facilities is normally 5–10 years.

An overview of the Group’s funding as of 31.12.17 is shown below.

NOK million Book value 31.12.17 Currency Notional in ccy Coupon Term Listed
Bonds
ORK80 (ISIN NO 001 069468.0) 966 NOK 1 000 Fixed 4.35% 2013/2024 Oslo Stock Exchange
ORK82 (ISIN NO 001 173173.0) 722 NOK 1 500 Nibor + 0.69% 2015/2022 Oslo Stock Exchange
ORK83 (ISIN NO 001 177438.3) 676 NOK 1 000 Nibor + 0.85% 2016/2023 Oslo Stock Exchange
ORK84 (ISIN NO 001 177439.1) 256 NOK 1 000 Fixed 2,35% 2016/2026 Oslo Stock Exchange
Other Private Placement   65
Total bonds 2 685
Bank loans 2 326
Other loans 168
Total interest-bearing liabilities 5 179
Interest-bearing assets 5 165
Net interest-bearing liabilities 14
Unutilised long-term credit facilities 3 600

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 31.12.17, debt secured by pledges amounted to NOK 62 million, whereas the book value of pledged assets was NOK 127 million. The Group’s total guarantee commitments amounted to NOK 192 million. Bonds issued in the Norwegian bond market are listed on the Oslo Stock Exchange.

Credit rating

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