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Mercedes-Benz Becomes the First Automotive Company in China to Issue a Green Panda Bond

Updated: Dec 21, 2022

Mercedes-Benz has announced the issue of an RMB 500 million (€68 million) Green Panda Bond in China, the company's first green bond offering outside of Europe.

Green Panda Bonds are issued by foreign issuers in mainland China, with proceeds distributed to green initiatives or assets. According to Mercedes-Benz, this is the first time an automotive business has issued green panda bonds.

Mercedes-Benz stated that the money from the offering will be used to finance the leasing of Battery Electric Vehicles to new customers. The carmaker revealed plans to electrify its fleet of vehicles in 2018, with a goal to go all-electric by 2030, if market conditions permit. Mercedes-Ambition Benz's 2039 strategy envisions a carbon-neutral automobile fleet by the end of the next decade.

The business announced earlier this year that it would enhance its use of green and sustainability-linked financial instruments as it released a new set of climate targets, including plans to reduce CO2 emissions per passenger vehicle by more than 50 percent by 2030.

Mercedes-Benz Group AG's Head of Treasury and Investor Relations, Steffen Hoffmann, stated

The issuance of the first Mercedes-Benz Green Panda Bond demonstrates our desire to spread our sustainable finance approach to our key growth locations around the world.

The company reported that interest in the panda green bond was high, with the issue being oversubscribed by more than threefold. The bond was issued with a duration of two years and a coupon rate of 2.9% per year.

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