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 1,391 911 456 1,337 4,094
2018 1,357 1,112
497 2,966
2019 729 228
1,335 2,291
2020 1,903 638
361 2,902
2021 690 0
1,310 2,000
2022 479 1,367
172 2,018
2023 228 0
156 384
2024 958 683
156 1,797
2025 1,222 0
176 1,398
2026 0 0   156 156
2027 287 0   0 287
>2028 670 0   0 670