Refinancing

REFINANCING STRUCTURE OF THE VOLKSWAGEN GROUP
as of December 31, 2013

The Volkswagen Group’s refinancing activities in 2013 continued to focus on the diversification of its issues, in particular using instruments with an equity component and longer maturities. We intend to further diversify our refinancing instruments in the future as well.

In this connection, for the first time, we issued unsecured subordinated hybrid notes with a principal amount of €2.0 billion. The perpetual hybrid notes were issued in two tranches and can only be called by the issuer. The first call date for the first tranche with a volume of €1.25 billion is after five years, and the first call date for the second tranche of €0.75 billion is after ten years.

In addition, the €2.5 billion mandatory convertible note that was successfully issued in November 2012 entitling and obliging the holders to subscribe for Volkswagen preferred shares was supplemented in June 2013 by another €1.2 billion mandatory convertible note.

To access new groups of investors, Volkswagen also placed an increasing number of fixed-rate bonds with a range of maturities of more than five years in the market. Here, we additionally offered maturities of more than 20 years for the first time. The maturity structure of the bonds we issued is shown in the chart above.

Although our activities are still concentrated geographically on the European refinancing market, we have also placed issues outside of Europe. Specifically, Volkswagen was active in the US capital market with a USD 2.15 billion issue.

In the asset-backed securities segment, the Volkswagen Group issued securities with a total value of €10.7 billion that are focused on Europe and North America.

We generally eliminate interest rate and foreign currency risk in all our financing transactions by entering into derivatives contracts at the same time.

The table below shows how our money and capital market programs were utilized as of December 31, 2013 and illustrates the financial flexibility of the Volkswagen Group:

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Program

 

Authorized volume
€ billion

 

Amount utilized on Dec. 31, 2013
€ billion

 

 

 

 

 

Commercial paper

 

25.2

 

5.4

Bonds

 

97.9

 

53.8

of which USD issues in the USA

 

 

 

8.1

of which hybrid issues

 

 

 

2.0

Asset-backed securities

 

49.3

 

19.1

The syndicated credit line of €5.0 billion agreed in July 2011 including two options for extension by a year in each case was extended for the second time by one year to July 2018 (from July 2016 to July 2018 with a reduced amount of €4.916 billion). The credit line remains unused.

Syndicated credit lines worth a total of €3.2 billion at other Group companies have also not been drawn down. In addition, Group companies arranged bilateral credit lines with national and international banks in various other countries for a total of €9.3 billion, of which €2.1 billion has not been drawn down.

These extensive financing measures ensure the solvency of the Volkswagen Group at all times.