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Volkswagen Sells $1.6 Billion Bond to Finance New Autos

Volkswagen AG, Europe’s biggest carmaker, sold 1.2 billion euros ($1.6 billion) in debt convertible to preferred stock to finance expansion that includes new plants and a full takeover of truck unit MAN SE.

Proceeds from the mandatory convertible notes, which have a 5.5 percent coupon and mature in November 2015, will be used to fund growth, Wolfsburg, Germany-based VW said today. The sale comes as VW’s Audi division, the world’s second-largest luxury-car manufacturer, starts making its new A3 sedan at a Hungarian plant that was expanded for more than 900 million euros.