VW Extends 20 Billion-Euro Credit Facility as Scandal Fines Loomby
Volkswagen AG plans to extend the maturity of a 20 billion-euro ($21 billion) credit facility, giving it extra financial breathing space amid talks with U.S. authorities over fines following a diesel-emissions scandal.
The automaker’s seeking to lengthen the bridge loan from banks until June, six months beyond the planned end date, according to an e-mailed statement on Monday. No money is “currently” drawn, the Wolfsburg, Germany-based company said.
Traditionally Europe’s biggest issuer of investment-grade corporate debt, VW has been largely shut out of bond markets since it admitted rigging emissions tests for as many as 11 million cars with diesel engines. It signed the bridge-loan facility with 13 banks, coordinated by Citigroup Inc. and UniCredit SpA, in December 2015, three months after the scandal erupted.
The company plans to return to the unsecured debt market “at the appropriate time,” according to the statement. It will continue selling asset-backed securities and commercial paper. The automaker led European sales of highly rated corporate bonds in each of the last five years, according to data compiled by Bloomberg.
VW has set aside 18.2 billion euros for fines and related expenses stemming from the emissions crisis. The scandal has caused a sales slump in the U.S. and the company has also lost market share in Europe. Deliveries in China, VW’s biggest market, have continued growing.