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.

 Year Bonds US PP Commercial paper   Bank financing Total
2017 1,393 894 541 1,596 4,424
2018 1,353 1,091
493 2,937
2019 715 223
1,328 2,267
2020 1,903 626
357 2,886
2021 680 0
1,303 1,983
2022 477 1,341
169 1,988
2023 223 0
153 377
2024 955 670
153 1,779
2025 1,211 0
173 1,384
2026 0 0   153 153
2027 286 0   0 286
>2028 668 0   0 668