Debt Investors

Capital allocation principles

  • Investment in the business
  • Progressive dividend policy
  • Strong, investment-grade credit rating
  • Immediately earnings accretive, value-enhancing opportunities


Our aim is to continue to strike a balance between the interests of the business, financial creditors and the company’s shareholders. After providing for investment in the business, supporting the progressive dividend policy and maintaining our strong, investment-grade credit ratings, we will keep under review any potential investment in value-enhancing and immediately earnings-accretive opportunities.


Funding strategy

  • The Board reviews the Company’s ongoing liquidity risks annually as part of the planning process and on an ad-hoc basis.
  • The Board considers short-term requirements against available sources of funding, taking into account forecast cash flows.
  • The Company manages liquidity risk by maintaining access to a number of sources of funding which are sufficient to meet anticipated funding requirements.
  • Specifically, the Company uses US commercial paper, committed bank facilities and cash resources to manage short-term liquidity.
  • The Company has $3bn of revolving committed credit facilities provided by 8 relationship banks.  These facilities were undrawn as at 31 December 2016 and will mature in April 2021.
  • The Company maintains access to the capital markets for long-term funding through an established Euro Medium Term Note (EMTN) programme and a SEC registered shelf programme.
  • These different funding programmes ensure that the Company has sufficient flexibility when choosing the maturity, currency, interest rate (fixed/floating), and geographical mix of investors.

A summary of utilisation from the Company’s debt programmes as at 31 December 2016 is shown in the table below.

 

Programme Last updated Valid to Limit Rating (Moody's/ S&P) Utilisation as at 31/12/2016

US Commercial Paper

N/A

N/A

USD 15bn

A-2 / P-2

USD 0.4bn

Euro Medium Term Note Programme

May-16

May-17

USD 5bn

A3 / A-

USD 4.2bn

SEC Registered Shelf Programme

Nov-16

Nov-19

Unlimited

A3 / A-

USD 12.8bn

Debt maturity profile

AstraZeneca chooses to hold a significant cash balance to meet operational funding needs. Gross cash and investments position as at 31 December 2016 was $6.2bn

1FX converted at 31 December 2016 spot rates (USD/EUR 0.9481; USD/GBP 0.8100)

Outstanding bonds

Below is a summary of the bonds issued or guaranteed by AstraZeneca PLC as at 31 December 2016, sorted by maturity date.

Currency Notional Issue date Maturity date Coupon Frequency ISIN
USD 1,750 12-Sept-07 15-Sept-17 5.90% Semi-annual US046353AB45
USD 1,000 16-Nov-15 16-Nov-18 1.75% Semi-annual US046353AH15
USD 400 16-Nov-15 16-Nov-18 3m Libor + 0.53% Quarterly US046353AJ70
USD 1,000 18-Sep-12 18-Sep-19 1.95% Semi-annual US046353AF58
USD 1,600 16-Nov-15 16-Nov-20 2.375% Semi-annual US046353AK44
EUR 500 12-May-16 12-May-21 0.25% Annual XS1411403709
EUR 750 24-Nov-14 24-Nov-21 0.875% Annual XS1143486865
USD 288 15-Nov-93 15-Nov-23 7.00% Semi-annual US98934KAB61
EUR 900 12-May-16 12-May-24 0.75% Annual XS1411404855
USD 2,000 16-Nov-15 16-Nov-25 3.375% Semi-annual US046353AL27
EUR 800 12-May-16 12-May-28 1.25% Annual XS1411404426
GBP 350 13-Nov-07 13-Nov-31 5.75% Annual XS0330497149
USD 2,750 12-Sep-07 15-Sep-37 6.45% Semi-annual US046353AD01
USD 1,000 18-Sep-12 18-Sep-42 4.00% Semi-annual US046353AG32
USD 1,000 16-Nov-15 16-Nov-45 4.375% Semi-annual US046353AM00

Credit ratings

AstraZeneca PLC aims to maintain a strong, investment grade credit rating.  The Company has solicited credit ratings from Moody’s and S&P, which are assigned as:

  Moody's
S&P
Short-term rating P-2 A-2
Long-term rating A3 A-
Outlook Stable Stable


Key contacts at the respective agencies are:

Moody’s

Analyst: Knut Slatten

Phone: 33-1-5330-1077

S&P

Analyst: Marketa Horkova

Phone: (44) 20-7176-3743

Treasury risk management policies

The Company operates with a centralised Treasury structure so that key Treasury risks are managed at a Group level.


Investment policy

  • Security and liquidity
  • Financial counterparty limits
     

Foreign Exchange Policy

  • Foreign Exchange exposures managed centrally
  • Transactional currency exposures substantially hedged
     

Interest Rate Policy

  • Level of floating rate debt matched to cash
  • Significant portion of financial liabilities at fixed interest rates
     

Credit Risk

  • Cash managed centrally
  • Derivatives positions fully collateralised
     

Liquidity Policy

  • Prudent level of available cash and unutilised credit facilities
  • Group funding centrally managed


Contact Us


Craig Marks

Senior Investor Relations Director, Finance/Fixed Income/M&A

Brendan Boucher

Group Treasurer


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