- Bonds follow Auto ABS as a refinancing instrument in China
- Contract portfolio in China at a record level
Braunschweig/Peking, 14-Jun-2016 — /EuropaWire/ — Volkswagen Financial Services have issued a bond in renminbi (RMB) for the first time and fully placed it with Chinese investors. The volume of the security issued by Volkswagen Finance (China) Co., Ltd., a wholly owned subsidiary of Volkswagen Financial Services AG, amounts to two billion renminbi, or approximately 270 million euros. The bond, which was placed in a bookbuilding process, has a term of three years and a coupon of 3.6 percent per year. The issue was oversubscribed 2.2 times overall, which reflects the high confidence of investors.
“Our business in China has grown strongly during the last few years. With our entry into the Chinese bond market, we now have a further alternative at our disposal to fund our growth,” says Frank Fiedler, CFO of Volkswagen Financial Services AG. He adds: “The fact that we are now also active in the unsecured capital market in China following the establishment of our ABS programme is a consequence of our clearly defined refinancing strategy. It is our intention to refinance ourselves locally and do so with a diversified range of instruments.”
Up to now, Volkswagen Financial Services have issued three Auto ABS (Asset-Backed Securities) transactions to refinance their Chinese business, which are secured by receivables of Volkswagen Finance (China). During the last few years Volkswagen Finance (China) has been able to steadily expand its financing business and achieved a new record level at the end of last year with a portfolio of 645,000 current contracts.
The most important components worldwide in the strategic refinancing mix of Volkswagen Financial Services are unsecured capital market issues, deposits from the direct banking business, and asset-backed securities. The funding volume generated worldwide through unsecured capital market instruments amounted to EUR 34.2 billion last year and thus contributed around 22 percent towards the refinancing of Volkswagen Financial Services.
The bond at a glance:
Issuer: Volkswagen Finance (China) Co., Ltd.
Volume: RMB 2 bn
Issuer credit rating: AA+ (China Chengxin International Credit Rating)
Issue rating: AA+ (China Chengxin International Credit Rating)
Term: 3 years
Issuing price: 100.00
Trade: China Interbank Bond Market
The bond was marketed by a banking consortium comprising Morgan Stanley Huaxin Securities and the Bank of China.
Information for editors
Volkswagen Financial Services are a business division of the Volkswagen AG group of companies and comprise Volkswagen Financial Services AG along with its associated companies and the financial service companies in the USA, Canada, Argentina and Spain that belong directly or indirectly to Volkswagen AG – with the exception of the financial services of the Scania and Porsche brands and Porsche Holding Salzburg. The key business fields embrace dealer and customer financing, leasing, the bank and insurance business, fleet management and mobility offers. Volkswagen Financial Services have a total of 15,182 employees worldwide – including 6,513 alone in Germany (as at: 31.12.2015). Volkswagen Financial Services reported total assets of around EUR 157.9 billion, an operating result of EUR 1.9 billion and a portfolio of around 16.6 million current contracts.
Contact for press inquiries:
Volkswagen Financial Services
Marc Siedler (Press Spokesman)
Tel.: + 49 5 31 / 2 12-876 75