Debt Information

Capital allocation policy and outstanding debt

    Capital allocation policy

    Our free cash flow has consistently been strong which has been a key pillar of our disciplined capital allocation.

- Our first priority is to invest in organic innovation to drive growth in the company.

- Secondly we aim to grow the dividend in line with underlying earnings growth.

- Thirdly we look at selective acquisitions which fit with our strategic priorities.

- And we also consider share repurchases.

 

    Financing strategy

- Our leverage policy is to target benchmark Net debt in the range of 2.0–2.5x EBITDA, commensurate with maintaining a strong investment grade rating (BBB+ / Baa1 or above).

- When refinancing we aim to space out our debt maturities to mitigate refinancing risk in any one year.

- We hold substantial undrawn committed bank facilities in order to maintain liquidity.



    Bank facilities

    As at 31 March 2022 we had:

- Undrawn committed revolving credit facilities from banks totalling US$2.6bn with 3 years average remaining tenor. This includes our core US$1.95bn club facility, committed until December 2025.

- US$3.9bn of outstanding bonds and no drawn bank facilities. The average remaining tenor was 6 years and we had no bond maturities until September 2024. The US$3.9bn bond debt included €500m of 1.56%   bonds due 2031 that we issued on 17 February 2022.

- Cash and Cash equivalents of US$179m.

   
    All our bank facilities contain one financial covenant requiring to keep an interest cover of Benchmark EBIT being at least 3x net interest. 

    As at 31 March 2022 this cover was 16x.

 

    Interest rate risk

- Our policy is to have 50% - 100% of our net funding at fixed interest rates, with the remainder at floating interest rates.

- We use interest rate swaps to adjust the balance between fixed and floating rate debt.

- As at 31 March 2022, 98% of our net funding was at fixed interest rates. Our debt levels are usually lower at 31 March due to strong cash inflows during H2. This typically increases the proportion of our debt that is fixed rate at 31 March. Conversely, debt levels are usually higher at 30 September as we pay staff incentives in June and the final dividend in July, which then reduces the proportion of debt which is at fixed rates.

 


    FX risk

- In business trading our revenues and costs are substantially in the same currency for most countries, minimising transactional FX risk. There is a translation risk when local currencies are converted into USD.

- Our borrowings are in USD, GBP and Euro. Looking at our total borrowings (bonds, drawn bank facilities and commercial paper) we aim for an allocation broadly in the currencies of our earnings, though we do not borrow in Brazilian Real or Colombian Peso. We use FX contracts to manage residual currency risk exposures.

 

    Credit ratings

    Our aim is to maintain a strong investment grade credit rating (BBB+ / Baa1 or above). Our current credit ratings are:

 

Standard & Poor’s

Moody’s

Long term

A-

Baa1

Long term outlook

Stable

Stable

Short term

A-1

P-2

 

    Bond maturity profile

    Experian aims to maintain a smooth profile for its bond debt to minimise refinancing risk in any given year.


Position at 31 March 2022, presented per calendar year.


The values shown above are before cross-currency swaps and FX swaps. Note that the allocation of bond debt across the currencies is broadly in line with the currencies of our earnings, as noted above. The FX rate used to translate GBP and EUR bonds to USD is the rate as at 31 March 2022.

    Outstanding debt

Bond debt Issuer Currency Amount (mils) Coupon Redemption date Issue date Series Rating
Euronotes Experian Finance plc  GBP 400 0.739% 29 Oct 2025 October 2020 EMTN A- stable outlook / Baa1 stable outlook
Euronotes Experian Finance plc GBP 400 3.25% 7 Apr 2032 April 2020 EMTN A- stable outlook / Baa1 stable outlook
US Notes Experian Finance plc USD 750 2.75% 8 March 2030 December 2019 144A A- stable outlook / Baa1 stable outlook
US Notes Experian Finance plc USD 500 4.25% 1 Feb 2029 January 2019 144A A- stable outlook / Baa1 stable outlook
Euronotes Experian Finance plc GBP 400 2.125% 27 Sept 2024 June 2018 EMTN A- stable outlook / Baa1 stable outlook
Euronotes Experian Finance plc EUR 500 1.375% 25 Jun 2026 May 2017 EMTN A- stable outlook / Baa1 stable outlook
Euronotes Experian Europe DAC EUR 500 1.56% 16 May 2031 February 2022 EMTN A- stable outlook / Baa1 stable outlook