Daimler Issues Its First Green Bond of €1 Billion

Posted on 8 September 2020 by Ken Zino
Ken Zino of UatoInformed.com on Daimler Green Bonds

Daimler will use the bond money to develop and produce zero-emission vehicles.

Daimler AG (ticker symbol DAI) has issued its first Green Bond to support CO2-neutral technologies and services. The benchmark Eurobond had a volume of €1 billion, a term of 10 years and an annual coupon of 0.75%. It was more than 4-times oversubscribed.  The issuance was arranged by BBVA, BNP Paribas, Commerzbank, Crédit Agricole, SEB and Unicredit.

“CO2-neutral mobility and production is a clear goal and an integral part of our sustainable business strategy,” said Harald Wilhelm, Member of the Board of Management of Daimler AG, responsible for Finance & Controlling/Daimler Mobility, and of Mercedes-Benz AG, responsible for Finance & Controlling.

The green bond aligns with the International Capital Market Association’s (ICMA) Green Bond Principles and is guided by the Daimler Green Finance Framework, which was introduced in June 2020. The Framework is a summary of the principles under which Daimler will use green financing instruments. It applies to a broad range of debt instruments such as green bonds, green promissory notes (Schuldscheine), green commercial paper and green loans.

Daimler will allocate the net proceeds from the green financing instruments in accordance with the Framework to develop and produce zero-emission vehicles such as battery-electric (BEV) and fuel-cell electric vehicles (FCEV).

More than 50% of the proceeds will be allocated to the “Clean Transportation” Category. Furthermore, the proceeds may be used, for example, to upgrade manufacturing facilities or construct new facilities to produce zero-emission vehicles and their drivetrains, and to establish the recycling of batteries and fuel cells.

One example among others is Factory 56, where the all-new S-Class is assembled. The recently opened zero-carbon factory is said to embody the future of production at Mercedes-Benz. Daimler’s Framework obtained “Dark Green”, the highest rating of CICERO, a leading provider of independent, research-based evaluations of green finance frameworks. (see Second Party Opinion)

“The proceeds of our first green bond will be used exclusively for financing green projects, enabling the transformation towards a carbon-free company and industry. The strong demand for our green bond demonstrates the attractive conditions as well as the confidence of investors in our strategy,” Wilhelm said.

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About Ken Zino

Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
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One Response to Daimler Issues Its First Green Bond of €1 Billion

  1. Pingback: Daimler to Spin-Off Daimler Truck into Separate Company | AutoInformed

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