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Mercedes-Benz issues its first Green Auto Loan ABS, expanding sustainable finance in China

Stuttgart (Germany) – WEBWIRE
  • Pioneering Initiative: Mercedes-Benz becomes the first foreign automaker to issue a Green Asset-Backed-Security (ABS) in China, with an annual coupon of 1.87% and oversubscription ratio of three times.
  • Expanding Sustainable Finance Instruments: Green ABS another example of expanding regional footprint in sustainable finance in line with Mercedes-Benz Ambition 2039.
  • Green Transformation: Proceeds will be used for financing the new retail loan business of Battery Electric Vehicles in China.

Mercedes-Benz Auto Finance Ltd. (MBAFC), part of the Mercedes-Benz Mobility group division, successfully issued its first Green Auto Loan Asset-Backed-Security (ABS) in July 2024 in the Chinese Interbank Bond Market. The Class A Notes have a size of RMB765 million (€100 million), with an oversubscription of three times, a weighted average life of 1.42 years and a coupon rate of 1.87%. The issuance was arranged by China Merchants Securities, BNP Paribas (China) Limited, Bank of China and Standard Chartered Bank (China) Limited. It is Mercedes-Benz’s first Green ABS worldwide and Mercedes-Benz is the first foreign automotive company which issued a Green Asset-Backed-Security in China.

[i"In line with our Ambition 2039, we continue to expand our green finance strategy. With this Green ABS, we are offering investors in the Chinese capital market another green financial investment. In 2022 and 2023, we had already successfully issued Green Panda Bonds.” [/i]
Steffen Hoffmann, Head of Treasury and Investor Relations of Mercedes-Benz Group AG

The issuance of the Green Auto Loan ABS is in line with the double-green approach of China’s domestic Green Bond standards for Finance Companies. The collateral pool consists of auto loans with Battery Electric Vehicles and the proceeds will be used to fund new auto loan contracts with Battery Electric Vehicles with MBAFC customers in the upcoming months.

 “With our product range we offer customers a comfortable entry into the electric era. The securitization of our customer receivables for electric vehicles demonstrates how much our financing products already support the sales of Mercedes-Benz electric vehicles" 
Franz Reiner, CEO of Mercedes-Benz Mobility

About Mercedes-Benz ABS activities in China

Since March 2016, Mercedes-Benz Auto Finance Ltd. (MBAFC) has issued under its Silver Arrow China Loan (SACL) platform 17 transactions with a total amount of around RMB114 billion (€14 billion). Acting as both originator and servicer MBAFC ensures that the ABS notes are backed by a pool of high-quality auto loans.

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