We enable growth and manage risks through a diverse range of financing sources

SATO is determined to continue expanding its financing structure. Diversified financing supports our strategic goals and profitable housing investments and strengthens our risk management.

To ensure the availability of financing and a broad financing base, we are aiming for an even stronger public credit rating. Our current rating by Moody’s is Baa3 (investment grade) with a stable outlook.

More unencumbered assets

During the review period, we increased the proportion of financing free of real securities, as well as the amount of unencumbered assets.

At the end of 2017, 66.3 per cent of our total assets were unencumbered. Our target for the unencumbered assets ratio is 60 per cent or more.

Unencumbered assets



Proportion of financing free of real securities increases

During the review period, we continued to diversify our financing structure and increased the proportion of unsecured financing. At the end of 2017, the proportion of unsecured financing out of the entire debt portfolio was 53.4 per cent.

During the review period, we signed two significant and exceptionally long agreements on bank loans free of real securities. In May, SATO and OP Corporate Bank agreed upon a bilateral loan of EUR 100 million. In August, SATO and Swedbank AB (publ) agreed upon a bilateral loan of EUR 100 million. Both of these are seven-year loans, and the cash proceeds will be used to cover the Group’s general financing purposes and to refinance secured loans.

Debt portfolio



Strong and multifaceted risk management

We are exposed to various financing risks in our business operations. Our risk management principles have been defined in the treasury policy approved by SATO's Board of Directors. The policy is implemented by SATOs treasury unit together with other business units.

The purpose of financing risk management is to reduce the impact of unfavourable movements in financing markets on the Group and its financial results, and to give business operations time to adjust to a changing market environment.

Our most significant financial risks relate to liquidity, refinancing and interest rates. We manage our liquidity and refinancing risks by diversifying the financing sources and maturity of our loan portfolio, and by holding sufficient liquidity reserves in the form of committed credit facilities and other long-term financing commitments.

The means to manage the liquidity risk at SATO include cash assets, bank account limit, committed credit facilities of EUR 400 million, and commercial paper programme of EUR 400 million. We increase the amount of reserves as the funding requirements grow. Our objective is to keep the liquidity requirements of the next 12 months covered by committed agreements.

Floating rate loans form an interest rate risk which we manage by balancing the share of fixed and floating rate loans either by issuing fixed rate loans or by interest rate hedges. According to our treasury policy, our objective is to keep the ratio of fixed rate loans at over 60 per cent of debt portfolio after interest hedging.

Our operations in St. Petersburg involve a currency risk. To reduce this risk, SATO hedges the exposure relating to committed foreign currency cash flows with forward contracts. The consolidation of foreign currency-denominated assets in the consolidated financial statements also involves a translation risk. Possibilities of hedging the translation risk are evaluated in accordance with our treasury policy.

Maturity profile

Sufficient financing through capital management

The purpose of SATOs capital structure management is to support the company's targets and to ensure the Group's operating conditions in capital markets. An optimal capital structure secures sufficient financing with competitive terms and the ability to pay dividends.

SATOs long-term financial target is to have an equity ratio of at least 35 per cent and a solvency ratio of less than 50 per cent. At the end of the review period, the equity ratio was 38.2 per cent and the solvency ratio was 52.1 per cent.

Equity ratio

Solvency ratio


Interest coverage ratio


Key figures of financing Target 2017 2016
Average loan maturity*, years 2.5–6 4.8 5
Average interest fixing period*, years 3–5 3 3.4
Average interest rate, at end of period, % - 2.2 2.5
Proportion of fixed rate debt*, % > 60 78.2 81.7
* including market based and interest subsidised portfolio, excluding ARAVA loans      

Stories & Activities


Intelligent services for residents

Katri Korhonen lives in a SATO building in the Sörnäinen district of Helsinki. For her, digital services are a natural part of daily life.

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Stories & Activities

Asumisen tuet

Housing support from the resident’s perspective

Pellervo Economic Research (PTT) studied housing subsidies at the request of SATO, the City of Espoo and Finnish Tenants.

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