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Volkswagen financial services has sold a renminbi bond to Chinese investors, the second time the German company has tapped the country’s bond markets in the past year.
The three-year debt totalled RMB 4bn, or around €534m, making it the largest ever single tranche deal from an auto finance company in renminbi. It came at a coupon of 5.2 per cent.
The world’s largest auto maker returned to European bond markets last month for the first time since the emissions scandal broke in mid-2015, selling €8bn of bonds.
While Volkswagen was the biggest issuer of corporate bonds in Europe from 2011 to mid-2015, the company was effectively locked out of developed bond markets after the emissions scandal.
In 2016, it issued its first bond in renminbi, selling Rmb2bn of bonds in May.
Despite returning to markets last month, the company has repeatedly pointed to its intentions to use Chinese markets to fund its growth.
“It is our intention to refinance our growth in China locally within that country and in a diversified manner. That is why we are active on the Chinese financial market both with our financial bonds and with our ABS programme as well,” said Bernd Bode, Head of Group Treasury and Investor Relations at Volkswagen Financial Services AG.
Volkswagen has focused on sales of securitisations backed by auto loans and leases over recent years. Its 2016 renminbi bond was preceded by three securitisation deals in China.