Daimler Issues $3 Billion of Bonds to Pay Inter-Company Loans

Daimler AG (DAI), the maker of Mercedes-Benz cars, issued $3 billion of debt in four parts.

Daimler sold $1.25 billion of 2.375 percent, five-year bonds to yield 105 basis points more than similar-maturity Treasuries and $250 million of floating-rate notes with the same maturity yielding 86 basis points more than the three-month London interbank offered rate, according to data compiled by Bloomberg.

The automaker also issued $750 million in both fixed-and floating-rate debentures maturing in 2016, Bloomberg data show. The 1.45 percent, fixed-rate securities pay 85 basis points more than benchmarks while the floaters yield 68 basis points more than Libor.

Proceeds from the sale will be used to pay inter-company loans and for general corporate purposes, the data show. The debt may be rated A3 by Moody’s Investors Service, according to a person familiar with the offering, who asked not to be identified, citing lack of authorization to speak publicly.

Stuttgart, Germany-based Daimler sold debt in January that included $1 billion of 1.875 percent, five-year bonds. The notes traded at 99.6 cents on the dollar to yield 1.97 percent on July 18, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The world’s third-largest maker of luxury vehicles posted a second-quarter profit of 4.58 billion euros, or $6.1 billion, up from 1.57 billion euros in the same period of 2012, the company said today in a statement distributed by PR Newswire.

To contact the reporter on this story: Scott Harrison in New York at sharrison52@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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