Debt Financing

ASSA ABLOY has a centralized funding strategy where funds are raised mainly by ASSA ABLOY AB and ASSA ABLOY Financial Services AB. The aim is to utilize a variety of funding sources and distribute the maturities over time. In this way refinancing risk is managed, while the possibility to use excess cash to repay outstanding debt is retained.

The Group uses a minimum target of 18 months for the capital duration of the debt portfolio. At the end of 2016, the capital duration was 49 months. Issuances in debt capital markets are key tools in the funding strategy, and issuances of bonds are primarily done under the Global MTN Program. Long-term bank loans are used to further diversify the funding sources.

A list of major financing transactions is found in the section Debt Structure.

The graph below shows the current maturity profile. The maturity profile includes short-term borrowings in the form of short-term bank loans and issuances of Commercial Papers. Interest rate risk, is measured by calculating an overall interest rate duration for the debt portfolio. The average interest duration should range between 12 and 36 months. At year-end of 2016, the interest duration was 28 months.

 YearBondsUS PPCommercial paper  Bank financingTotal
2017 884   2,660 1,401 4,945
2018 1,359 1,033
383 2,774
2019 677 212
1,335 2,224
2020 1,920 593
517 3,030
2021 653 0
1,310 1,963
2022 665 1,270
1,032 2,967
2023 212 0
145 357
2024 1,137 635
145 1,917
2025 1,197 0
165 1,363
2026 0 0   145 145
2027 593 0   0 593
>2028 677 0   0 677