By Susanna Moon
Chicago, Dec. 4 – AB Volvo said it issued €1.5 billion of hybrid bonds (Ba1/ BB+) in two tranches via its wholly owned subsidiary Volvo Treasury AB.
The company issued €900 million of 4.2% bonds due in 60.5 years, with a first call after 5.5 years, and €600 million of 4.85% bonds due in 63.25 years, with a first call after 8.25 years.
The hybrid bond will be accounted for as a loan and subordinated to all other financial liabilities outstanding. The hybrid bond will be eligible for 50% equity treatment from both Moody’s and S&P when calculating Volvo’s credit ratios.
The issue will “further strengthen the group’s balance sheet and prolong the maturity structure of the debt portfolio,” according to a company press release.
The Volvo Group is a Goteborg, Sweden-based manufacturer of trucks, buses, construction equipment and marine and industrial engines. The Group also provides complete solutions for financing and service.
| Issuer: | AB Volvo
|
| Issue: | Hybrid bonds
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| Amount: | €1.5 billion
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| Pricing date: | Dec. 4
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| Settlement date: | Dec. 10
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| Ratings: | Moody’s: Ba1
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| S&P: BB+
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| Tranche 1
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| Amount: | €900 million
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| Maturity: | 60.5 years
|
| First call: | 5.5 years
|
| Coupon: | 4.2%
|
|
|
| Tranche 2
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| Amount: | €600 million
|
| Maturity: | 63.25 years
|
| First call: | 8.25 years
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| Coupon: | 4.85%
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