Treasury 

 
 

Financial Strategy
With the global market as its arena, Odfjell is exposed to a number of risk factors. Our financial strategy shall be sufficiently robust to withstand prolonged adverse conditions, including long-term downturns in our markets or challenging conditions in the financial markets. Odfjell adopts an active approach to managing risk in the financial markets. This is achieved through funding from diversified sources, maintaining high liquidity or credit reserves, and through systematic monitoring and management of financial risks related to currencies, interest rates and bunkers.

Debt Financing
Odfjell has a stable debt structure, and borrows from major international shipping banks with whom the Company enjoys long-standing relationships. The Company has a diversified debt portfolio comprising a combination of secured loans, export credit finance, finance leases and unsecured bonds. Although our experience is that funding is available to Odfjell from various sources, including the banks and the bond market, the general trend in the financial market is towards medium-term loans, as long-term funding is less available and more expensive. As a consequence, we pay continuous attention to the timely refinancing of maturing debt. The average maturity of the Group’s interest-bearing debt per 31.12.15 was about 4.0 years.

 

(USD 1 000)

Average interest rate

31.12.2015

Loans from financial institutions – floating interest rates

2.56%

628 147

  Short-term interest bearing debt

3.59%

16 707

Finance leases

3.25%

307 375

Bonds

7.00%

221 747

Subtotal interest bearing debt

   3.60%

1 173 977

Transaction cost

 

(5 998)

Total interest bearing debt

 

1 167 979

  

The interest bearing debt does not contain any restrictions on the Company’s dividend policy or financing opportunities. The interest bearing debt is generally subject to certain financial covenants which include that book debt ratio shall at all times be less than 75%  (excluding deferred taxes from debt) and that the liquidity shall always be minimum of USD 50 million.  Any free liquid assets in companies included 100% in the consolidated accounts of Odfjell SE can also be included in the calculation on a pro-rata basis corresponding to the Odfjell’s ownership, provided there are no restrictions on lending or distributions of any kind from the relevant company to Odfjell SE. Odfjell SE on a consolidated basis shall at all times maintain free liquid assets of minimum 6% of interest bearing debt.


Odfjell has not obtained any official credit rating for the company or any of its bonds.
[Odfjell has a trade-prohibition period for primary insiders that start the day the reporting period ends and lasting to the release of the quarterly report for the relevant period.]

 

 

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