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 2018, the capital duration was 42 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 2018, the interest duration was 28 months.

Debt maturity profile as at 30 September 2019.

 YearBondsUS PPCommercial paper  Bank financingTotal
2019 536 0 2,929 3,137 6,602
2020 2,116 686
734 3,537
2021 1,249 0
1,448 2,697
2022 987 1,470
1,144 3,601
2023 3,080 0
180 3,261
2024 2,434 735
168 3,337
2025 2,178 0
168 2,346
2026 215 0
168 383
2027 1,398 0   0 1,398
>2028 3,090 0   0 3,090