Mercedes-Benz becomes 1st MNC to issue green Panda bond in China

Mercedes-Benz became the first multinational company to issue a green Panda bond in China.

HSBC announced that it has helped Mercedes-Benz to issue 500 million yuan (US$69.43 million) worth of green Panda bonds, the first such bond issued by an MNC.

It was also Mercedes-Benz's first green bond outside of the European market and made it the first automotive company to issue a green Panda bond in China.

The bond was issued by Mercedes-Benz International Finance BV on November 24 with a term of two years and a coupon rate of 2.9 percent in the Chinese interbank bond market, guaranteed by Mercedes-Benz Group AG. The issuance was arranged by Bank of China and HSBC.

The issuance has received an overwhelming response from domestic and international investors, with the bond being 3.1 times oversubscribed.

Eddie Ching, senior executive vice president and deputy chief executive officer of HSBC China, said, "The success of Mercedes-Benz's first attempt at green Panda bond issuance among multinational companies demonstrates that China, the world's second-largest bond market, is becoming increasingly attractive to international issuers."

The implementation of the latest China Green Bond Principles further promotes the harmonization of standards in the domestic green bond market, along with alignment with international standards, Ching added. "It is expected to attract more international issuers to participate in China's green bond market and explore the issuance of sustainable development bonds and other innovative varieties."

The bond was issued in line with China's domestic Green Bond standards and with the Mercedes-Benz Ambition 2039. Net proceeds will go to Mercedes-Benz subsidiary Mercedes-Benz Leasing Co based in China, which will use the funds for financing new customer-leasing contracts with battery electric vehicles, according to the German auto giant.