- Volume of Driver China five totals around four billion renminbi
- More than 775,000 contracts on the books in China after the third quarter
Volkswagen Financial Services have successfully placed their fifth and to date largest Chinese Auto Asset-Backed Securities (ABS) transaction. The securitisation transaction, Driver China five, which is backed by vehicle financing contracts from Volkswagen Finance China, has a volume of around four billion renminbi (RMB), or approximately 547 million euros. This is the third ABS transaction issued by Volkswagen Financial Services in China this year alone. In addition, an unsecured bond was placed on the capital market for the first time in May with a volume of two billion renminbi. The Chinese market is one of the drivers of the global growth of Volkswagen Financial Services. The volume of current contracts in the Chinese market at the end of the third quarter amounted to more than 775,000 contracts, an increase of almost 23 percent.
"As a result of our continued strong growth in China, our refinancing needs are also increasing," says Frank Fiedler, CFO of Volkswagen Financial Services AG. He adds: "That's why we intend to expand our ABS and our capital market activities in China over the next few years. Driver China five is our highest-volume ABS transaction in China to date. We are very satisfied with the placement result that has been achieved."
With a figure of almost EUR 30 billion (previous year: around EUR 22 billion), the share of Auto ABS in the refinancing mix of Volkswagen Financial Services amounted to more than 18% as at 30.09.2016 (previous year: around 15%).
The order books were fully covered during the bookbuilding process, with orders placed by both Chinese and international investors; tranche A was placed at a fixed interest rate of 3.5%, tranche B at 4.0%.
The following tranches were placed:
- Tranche A: RMB 3.5 billion
Local rating: CCXI/CBR [AAA/AA+]
International rating: Moody’s/S&P [Aa3(sf)/AA(sf)]
- Tranche B: RMB 150 million
Local rating: CCXI/CBR [AA/AA]
International rating: Moody's/S&P [A3(sf)/BBB(sf)]
With this transaction, the company marketed a diversified provisional pool of receivables from 69,000 financing contracts. The average financed value per vehicle amounts to around RMB 58,000, or approximately EUR 7,940. In addition to local ratings, the transaction has also been given international ratings and bears the quality label "Certified by TSI – deutscher Verbriefungsstandard" from True Sale International GmbH.
The marketing of the transaction was carried out by the lead underwriter CITIC Securities Co., Ltd., the joint lead underwriter HSBC Bank (China) Co., Ltd. ("HSBC"), and the co-lead underwriter Industrial and Commercial Bank of China Co., Ltd.
Information for editors
Volkswagen Financial Services are a business division of the Volkswagen AG group of companies and comprise Volkswagen Financial Services AG along with its associated companies and the financial services companies in the USA, Canada, Argentina and Spain that belong directly or indirectly to Volkswagen AG – with the exception of the financial services of the Scania and Porsche brands and Porsche Holding Salzburg. The key business fields embrace dealer and customer financing, leasing, the bank and insurance business, fleet management and mobility offers. Volkswagen Financial Services have a total of 15,182 employees worldwide – including 6,513 alone in Germany. Volkswagen Financial Services reported total assets of around EUR 157.9 billion, an operating result of EUR 1.9 billion and a portfolio of around 16.6 million current contracts (as at: 31.12.2015).
Contact for press inquiries:
Volkswagen Financial Services