Client case: How Hendrix Genetics gained full control over interest rate risks with Orchard Finance

A complex refinancing, turbulent markets, and a global footprint: for Hendrix Genetics, a worldwide leader in animal genetics, all challenges converged at once. In this case study, Colinda Hogervorst, Group Treasurer, explains how Orchard Finance, and specifically advisor Alwin de Haas, played a crucial role in designing and executing a comprehensive interest rate hedging strategy.

Building a treasury function

Hendrix Genetics was founded in 2005 and grew rapidly through acquisitions. With this growth came increased financial complexity and risk. In response, the company decided to establish a formal treasury function in 2020.

When Colinda joined in July 2022, she found the organization in a turbulent period:

• a recent shareholder transition (with PSP as the new majority shareholder),
  
• a sharp drop in EBITDA due to avian influenza, African swine fever, soaring feed prices and the energy crisis,
  
• the departure of both the CEO and CFO,
  
• and a financing structure under significant pressure as a result.
  

“I started with an urgent need to extend our existing financing. In that situation, the logical priority is not interest or FX risk, it’s keeping the funding in place,” Colinda explains.

In 2023, the existing financing was successfully extended, and in April 2024 a full refinancing was completed with a renewed banking consortium (Rabobank, Crédit Agricole, HSBC, Citibank, and Farm Credit Canada). Only then did the company finally have the bandwidth to structurally manage interest rate risk.

Why hedging became necessary

With more than €175 million in floating-rate loans, exposure to interest rate risk was substantial. Market volatility, which had risen sharply since 2018, increased the need for predictability in future interest expenses.

Colinda Hogervorst:
“We saw how unpredictable our EBITDA could be, driven by external factors entirely beyond our control. Then it makes sense to stabilize the parts of the results you can influence.”

In addition to P&L stability, covenant certainty played a major role as well.

The role of Orchard Finance: from sparring partner to transaction lead

Orchard Finance had been involved with Hendrix Genetics before and had advised on the extension of the previous financing. For the hedging project, Colinda again wanted an experienced and independent sparring partner.

“These kinds of major hedge transactions are not something we do every day. You need someone who knows the market, deeply understands the products, and can challenge you on both content and strategy,” says Colinda.

The collaboration with Alwin included:

1. Market analysis and strategy development

• insights into historical and expected future interest rate developments,
  
• scenario analyses and pricing indications,
  
• discussions on product selection, maturities, and assessing the company’s risk appetite,
  
• support in communication with the Supervisory Board.
  

2. Technical execution of the hedges

• preparing a full trader’s briefing in “traders’ language,”
  
• requesting, comparing, and evaluating quotes,
  
• real-time pricing support during execution.
  

3. Aftercare: confirmations and hedge effectiveness

• reviewing hedge confirmations (none were correct on the first version),
  
• identifying and correcting a missing element in the loan documentation,
  
• ensuring hedge accounting compliance through perfect alignment with the underlying loans.
  

“For six major derivatives, each with its own complexities, you really need more than one pair of eyes. Together you look at: are we missing anything? Is the pricing market-conform? Is the hedge 100% effective? That was extremely valuable for us,” says Colinda.

The challenge of an international loan portfolio

The hedges needed to match a loan portfolio with:

• multiple currencies (EUR, USD, CAD),
  
• different maturities,
  
• structures with and without amortizations,
  
• multiple intra-group borrowers,
  
• a subordinated loan,
  
• and execution across three different banks (requiring eight ISDA agreements in total).
  

The entire project took several months, much of which was spent on documentation and coordination with the banks.

What made this project unique

1. A deep and extensive preparation phase

Colinda highlights that determining risk appetite and choosing the right products is often underestimated.

“I had three extensive sessions with our Supervisory Board. Not only about products, but also about scenarios such as change of ownership and a potential future private equity exit. This may not be the case in other companies,” says Colinda.

2. A full hedge executed in one go

While many companies hedge in phases, Hendrix Genetics opted to hedge the entire loan portfolio at once, a complex but strategically strong decision.

3. The intensity of the collaboration

“We truly did this together,” says Colinda. Alwin was not a distant advisor, but a direct sparring partner in every step of preparation, pricing, evaluation, and execution.

The result

• a fully hedged loan portfolio,
  
• stable interest expenses for the coming years,
  
• full application of hedge accounting,
  
• strengthened governance around interest rate risk management within Hendrix Genetics.

In closing

Colinda looks back on the collaboration with Orchard Finance with great appreciation:

“This was not business as usual for us. But with Orchard, and with Alwin as our dedicated sparring partner, we were able to navigate this process with confidence. His market knowledge, real-time involvement, and ability to think along at both a strategic and technical level truly made the difference.”