36 JOTUN GROUP 14 FINANCIAL RISK MANAGEMENT The Jotun Group’s policy is to have sufficient long-term loans and committed credit facilities to cover expected financing needs with an additional strategic reserve of five percent of consolidated sales. Commercial papers and money markets are used as a source of liquidity when conditions in these markets are competitive compared to drawing on committed long-term credit facilities. As of 31 December 2015 there were no drawings on these credit facilities. Jotun Group’s main sources of financing are loans in the Norwegian Bond market and bilateral loans from the Group’s relationship banks. The term to maturity for new loans and credit facilities is normally 5-10 years. In 2015 the Jotun Group has maintained its bond funding of NOK 1 300 million and its bilateral loan with the Nordic Investment Bank (NIB) of USD 120 million. The table below gives and overview of total and net interest-bearing debt. BOOK VALUE* (NOK THOUSAND) 31.12.2015 31.12.2014 CURRENCY COUPON TERM NON-CURRENT INTEREST-BEARING LIABILITIES Bonds Bond 2013-16 – 600 000 NOK NIBOR + 1.2% 2016 Bond 2014-19 600 000 300 000 NOK NIBOR + 0.9% 2019 Bond 2014-21 400 000 400 000 NOK Fixed rate 3.8% 2021 Bank debt (NIB), unsecured 1 056 744 898 660 USD US LIBOR + 1.2% 2024 Bank debt Oman, pledge in tangible assets 145 433 28 490 OMR Oman BLR – 9.5% 2019 Bank debt BNDES Brazil, secured with bank guaranty 104 839 130 504 BRL TJLP + 1.8% 2021 Other bank debt, unsecured 16 496 52 919 Total 2 464 506 2 410 573 of this current liabilities (first year’s repayment) –140 994 –31 536 Total non-current interest-bearing liabilities 2 323 512 2 379 037 CURRENT INTEREST-BEARING LIABILITIES Bond 2013–16 300 000 – NOK NIBOR + 1.2% 2016 Certificate loans, unsecured – 200 000 NOK Average 1.97% Credit line facilities 14 616 74 422 Bank loans, maturity < 1 year 140 994 31 536 Other loans 498 765 640 885 Total current interest-bearing liabilities 954 374 946 843 Total interest-bearing liabilities 3 277 887 3 325 880 Non-current interest-bearing receivables 165 557 202 855 Current interest-bearing receivables – – Cash and cash equivalents 1 520 840 1 421 421 Net interest-bearing liabilities 1 591 490 1 701 604 *) The fair value of interest-bearing assets and liabilities in the table above equal the respective book values. Interest rates related to the bond agreements are based on a three month floating-rate note, making the fair value in all material aspects equal to its book value. BANK DEBT OMAN, PLEDGE IN TANGIBLE ASSETS The interest rate tied to the bank loan in Oman is based on the Base Lending Rate (BLR) as made public by the local central bank, less 9.5 percentage points. The loan is secured by a first charge over certain of Jotun Paints Co. L.L.C.’s (Oman) land and buildings with a carrying value of NOK 154 million (2014: NOK 41 million). BANK DEBT BNDES BRAZIL, SECURED WITH BANK GUARANTEE The nominal interest rate related to the BNDES loan in Brazil is at a rate defined by the government (TJLP), and is below the local market interest level. NON-CURRENT INTEREST-BEARING RECEIVABLES Non-current interest-bearing receivables consists mainly of loans from Jotun A/S to joint ventures and associated companies.
Jotun - Annual Report 2015
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