Debt information
Rentokil Initial finances its operations using a mixture of public bonds, bank borrowings and leases.
The group targets a BBB investment grade credit rating. It is currently rated BBB with a stable outlook by both S&P Global and Fitch Ratings.
The group has a $1bn Revolving Credit Facility with a syndicate of 16 banks. The facility has a maturity date of 12 October 2029.
The group has a European medium-term note programme (EMTN) to facilitate access to capital markets. The offering circular may be found here.
The group also has a €1,000,000,000 European Commercial Paper Programme to facilitate access to short-term capital markets.
As at 28 April 2025, the group had a well-spread maturity profile with outstanding maturities as below:
The group seeks to manage interest rate risk to ensure reasonable certainty of its interest charge while allowing an element of risk exposure consistent with the variability of its cash flows. Interest rate risk is managed by the use of fixed interest debt and interest rate derivatives, which are approved in advance by the Treasury Committee. The group policy is to fix a minimum of 50% of its estimated future interest rate exposures (excluding pensions) for a minimum period of 12 months forward. The Treasury Committee reviews this exposure monthly.
Foreign exchange risk
The group’s worldwide operations generate profits and cash flows in foreign currencies. Sales and purchases are typically denominated in the currency of the country in which they are transacted, and the group’s cross-border procurement is considered insignificant.
The group’s primary exposure to foreign exchange risk is in relation to the translation of assets and liabilities, and the group aims to hold debt in currencies in
proportion to its forecast foreign currency profits and cash flows. The Treasury Committee monitors foreign exchange exposures on a monthly basis. Dealing in foreign exchange products is controlled by dealing mandates approved by the Treasury Committee and all foreign exchange transactions are covered by ISDA documentation.
The most significant foreign currency groups are US dollars and euros, which make up 54% and 21% of Group Adjusted Operating Profit respectively.
At 31 December 2024 the Group’s net debt was approximately 63% US dollar (2023: 74%), 21% euro (2023: 30%), pound sterling 14% and offset by cash 1% (2023: offset by cash 4%) in other currencies. The translation of the interest element of euro and US dollar debt provides a partial income statement offset to the translation of earnings.
Treasury risk
The group’s treasury activities are governed by a treasury policy, which is reviewed and approved by the Board on an annual basis. The treasury policy covers all activities associated with managing the above risks. The policy requires that financial instruments are only utilised to manage known financial exposures and speculative derivative contracts are not entered into.
Liquidity risk
The group is committed to ensuring it has sufficient liquidity to meet its business needs, and appropriate reserves to cover operational underperformance or dislocation in the financial markets. The group’s policy is to have headroom of unrestricted cash and available committed facilities of at least £600m, and the Treasury Committee manages financing requirements and associated headroom at least 12 months forward.
The group’s next maturity is the €400m bond in November 2024.
Capital risk
The group is committed to maintaining a debt/equity structure that allows continued access to a broad range of financing sources and sufficient flexibility to pursue commercial opportunities as they present themselves, without onerous financing terms and conditions. The group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to support the group’s strategy. Capital consists of ordinary shares, retained earnings and non-controlling interests in the group. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.
Debt credit rating
The group’s debt is rated by S&P Global and Fitch Ratings as BBB with a stable outlook. The group targets a rating of BBB for debt issuance over the medium term. A rating of BBB- or above is considered an ’investment grade’ rating. The group’s euro denominated bonds issued prior to June 2022, contain a ’coupon step-up’ increasing the coupon payable by 1.25% in the event that the group is downgraded to BB+ or below (sub-investment grade). The bonds issued in June 2022 do not contain such a provision.
Financial covenants
The group’s RCF has no financial covenants.
Change of Control
The group's medium-term notes may be recalled by its investors in the event of a change of control of the group, or within 120 days if:
(a) the group's debt is downgraded below investment grade or the rating is withdrawn; and
(b) the rating agency confirms in writing, either publicly or in writing to the issuer or the Trustee, that the rating action occurred either wholly or in part due to the change of control.