Debt Financing Strategy
The overall objective relating to Autoliv’s target capital structure and credit rating is to provide Autoliv with sufficient flexibility to manage Autoliv’s business and allow the Company to realize strategic opportunities and fund growth initiatives while creating shareholder value.
Autoliv is committed to maintain a strong investment grade company credit rating and currently has a credit rating from S&P Global Ratings (“S&P”) of BBB (stable).
Autoliv’s long-term target for the leverage ratio is 1.0x with the aim to operate within the range of 0.5x to 1.5x.
To reduce the financing risk, ensuring access to funding in a cost-efficient way, Autoliv strives to diversify its funding sources and debt maturities.
Autoliv has diversified its long-term funding sources by issuing notes in the USPP and Eurobond markets, and by signing a bilateral loan agreement with Swedish Export Credit Corporation. To further ensure access to funding long-term funding Autoliv has signed a Revolving Credit Facility (RCF) with 11 banks. To be able to swiftly access the Euro market, Autoliv has an EMTN (Euro Medium Term Note) program in place.
The Company also has established programs for short-term issuance of commercial papers in the Swedish and US markets and short-term credit agreements with several banks.