Financial policies
DSM's financial policies cover investor relations, cash flow, dividends, silent periods and accounting.
Debt & credit overview
External sources of funding
Debt and credit rating
As a basis for and contribution to effective risk management and to ensure that the company will be able to pursue its strategies even during periods of economic downturn, Koninklijke DSM N.V. retains a solid financial policy.
The company aims to maintain a strong investment grade long-term credit rating for senior unsecured debt; most external funding needs being financed through long-term debt. DSM also has a commercial paper program and revolving committed credit facilities.
Debt
DSM aims to spread the maturity profile of outstanding bonds in order to have adequate financial flexibility. The weighted average interest rate of the bonds (including derivatives) was 1.78% in 2020 (2.31% in 2019).
Debt covenants are not included in the terms and conditions of outstanding bonds and financing arrangements.
Debt maturity profile at 31 Dec 2020
| Due date | Amount in € mln |
|---|---|
| 26 Sep 2022 | 500 |
| 03 Apr 2024 | 500 |
| 09 Apr 2025 | 500 |
| 28 Sep 2026 | 750 |
| 23 Jun 2028 | 500 |
| 23 Jun 2032 | 500 |
Outstanding bonds in detail
| Rate, Currency & Period | 0.75%, €, 2016 - 2026 |
|---|---|
| Issuer | Koninklijke DSM N.V. |
| Rating | Moody's: A3, Standard & Poor's: A- |
| Listing | NL |
| ISIN Code | XS149537350 |
| Volume | €750 million |
| Issue price | 99.799% |
| Coupon | 0.75% |
| Term | 10 years |
| Maturity | 28 Sep 2026 |
| Rate, Currency & Period | 1.00%, €, 2015 - 2025 |
|---|---|
| Issuer | Koninklijke DSM N.V. |
| Rating | Moody's: A3, Standard & Poor's: A- |
| Listing | NL |
| ISIN Code | XS1215181980 |
| Volume | €500 million |
| Issue price | 99.41% |
| Coupon | 1.00% |
| Term | 10 years |
| Maturity | 09 Apr 2025 |
| Rate, Currency & Period | 1.375%, €, 2015 - 2022 |
|---|---|
| Issuer | Koninklijke DSM N.V. |
| Rating | Moody's: A3, Standard & Poor's: A- |
| Listing | NL |
| ISIN Code | XS1293087703 |
| Volume | €500 million |
| Issue price | 99.84% |
| Coupon | 1.38% |
| Term | 7 years |
| Maturity | 26 Sep 2022 |
| Rate, Currency & Period | 2.375%, €, 2014 - 2024 |
|---|---|
| Issuer | Koninklijke DSM N.V. |
| Rating | Moody's: A3, Standard & Poor's: A- |
| Listing | NL |
| ISIN Code | XS1041772986 |
| Volume | €500 million |
| Issue price | 99.56% |
| Coupon | 2.38% |
| Term | 10 years + 1 month |
| Maturity | 03 Apr 2024 |
| Rate, Currency & Period | 0.25%, €, 2020 - 2028 |
|---|---|
| Issuer | Koninklijke DSM N.V. |
| Rating | Moody's: A3, Standard & Poor's: A- |
| Listing | NL |
| ISIN Code | XS2193978363 |
| Volume | €500 million |
| Issue price | 99.65% |
| Coupon | 0.25% |
| Term | 8 years |
| Maturity | 23 Jun 2028 |
| Rate, Currency & Period | 0.625%, €, 2020 - 2032 |
|---|---|
| Issuer | Koninklijke DSM N.V. |
| Rating | Moody's: A3, Standard & Poor's: A- |
| Listing | NL |
| ISIN Code | XS2193979254 |
| Volume | €500 million |
| Issue price | 99.13% |
| Coupon | 0.63% |
| Term | 12 years |
| Maturity | 23 Jun 2032 |
Liabilities structure as at 31 Dec 2020
| 2020 | 2019 | |||
|---|---|---|---|---|
| Borrowings amount in € millon | Total | of which current | Total | of which current |
| Debenture loans | 3,237 | - | 2,244 | - |
| Private loans | 81 | 7 | 41 | 8 |
| Lease liabilities | 215 | 47 | 236 | 49 |
| Credit institutions | 53 | 53 | 132 | 132 |
| Total | 3,586 | 107 | 2,653 | 189 |
Committed credit facilities
DSM holds a €1.0 billion revolving committed credit facility (RCF), which serves as back-up funding. The interest rate of this RCF is linked to DSM's Greenhouse Gas (GHG) emission reductions.
| Borrower | Koninklijke DSM N.V. |
| Senior unsecured long-term rating | Moody's: A3, Standard & Poor's: A- |
| Facility amount | €1,000 million |
| Maturity | 29 May 2025 (First and second extension options exercised) |
| Purpose | General |
| Financial covenants | None |
| MAC clause | None |
In addition to this €1.0 billion RCF, in April 2020 DSM established further bi-lateral RCFs totaling €500 million. These are a precaution against potential negative impacts on DSM’s liquidity due to the COVID-19 crisis. The tenors of these bilateral RCFs range from 12 months (with extension options) to 2 years.
| Borrower | Koninklijke DSM N.V. |
| Senior unsecured long-term rating | Moody's: A3, Standard & Poor's: A- |
| Total bi-lateral facilities amount | €500 million |
| Tenor | Between 12 months (with extension options) and 2 years |
| Purpose | General |
| Financial covenants | None |
| MAC clause | None |
€5 billion debt issuance program
Royal DSM's €5 billion Debt Issuance Program is a framework with standard terms & conditions, which are applicable if Notes are issued. Additionally, the Debt Issuance Program includes risk factors, company description, financial information and the form of final terms of various kinds of debt. These terms & conditions, form of final terms, risk factors and financial information on Royal DSM are laid down in the Base Prospectus.
The Dutch Authority for the Financial Markets (AFM), which is responsible for supervising the operation of the financial markets approved the Prospectus on 29 May 2020. This approval is valid for 1 year.
The AFM has further approved the First Supplement to the Base Prospectus dated 17 June 2020.
As required by the AFM, we are required to maintain a list of prospectuses, documents referred to in the prospectuses, supplements to the prospectuses and/or the final terms of base prospectuses for a period of 10 years:
- 28 Nov 2018 - Base Prospectus €5 billion Debt Issuance Program
- 30 Nov 2017 - Base Prospectus €4 billion Debt Issuance Program
- 16 Sep 2016 - Base Prospectus €4 billion Debt Issuance Program
- 24 Mar 2015 - Base Prospectus €4 billion Debt Issuance Program
- 11 Nov 2013 - Base Prospectus €3 billion Debt Issuance Program
- 02 Oct 2013 - Base Prospectus €3 billion Debt Issuance Program Supplement
- 05 Sep 2013 - Base Prospectus €4 billion Debt Issuance Program
- 31 May 2012 - Base Prospectus €3 billion Debt Issuance Program Update
- 16 Dec 2010 - Base Prospectus €3 billion Debt Issuance Program
€2 billion commercial paper program
Royal DSM's Euro Commercial Paper Program is a framework with standard terms and conditions which are applicable if Notes are issued. The Euro Commercial Paper Program is not quoted on a Stock Exchange. The terms & conditions of this program are laid down in the Memorandum.
| Issuer | Koninklijke DSM N.V. |
| Short term rating | Moody's: P-2, Standard & Poor's: A-2 |
| Date of implementation | 15 May 2020 |
| Maximum Volume | €2,000,000,000 |
| Tenor | Between 1 and 364 days |
| Minimum denomination | €100,000 or £100,000 |
| Clearing agent | Euroclear |
| Dealers | ABN AMRO Bank N.V., BNP Paribas Fortis SA/NV, Citigroup Global Markets Europe AG, Citigroup Global Markets Limited, Coöperatieve Rabobank U.A., ING Bank N.V. and NatWest Markets N.V. |
| Issuing & Paying agent | Citibank, N.A., London branch |
Credit rating
Rating agencies and DSM senior management hold regular review meetings as part of our aim of maintaining a strong investment grade long-term credit rating for senior unsecured debt.
The rating agencies Moody’s and Standard & Poors have awarded the following ratings for the company’s long- and short-term debt:
| Agency | Long/short-term rating | Outlook | Last Updated |
|---|---|---|---|
| Moody's | A3/P-2 | Stable | 06 Oct 2020 |
| Standard & Poor's | A-/A-2 | Stable | 12 Jun 2020 |
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Analysts & Vara consensus
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