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 2015, the capital duration was 46 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 2015, the interest duration was 26 months.

 Year Bonds US PP Commercial paper   Bank financing Total
2016 674 648 1,200 2,021 4,543
2017 1,389 858
473 2,720
2018 1,356 1,047
341 2,744
2019 687 215
1,309 2,210
2020 1,780 601
333 2,714
2021 659 0
1,286 1,945
2022 481 1,288
167 1,936
2023 215 0
147 362
2024 962 644
147 1,753
2025 770 0
168 938
2026 0 0   147 147
2027 288.7 0   0 289
>2028 673.6 0   0 674