Volvo Cars announced the successful placement of a €500 million green bond offering. The company reported very strong demand for the issue, with the offering 5 times oversubscribed. The bond was issued under the company’s Euro Medium Term Note programme, maturing in October 2027 and with a fixed coupon of 2.5%.
According to Volvo Cars, the proceeds from the bond issue will be used to fund the design, development and manufacturing of fully electric cars in line with the company’s recently established Green Finance Framework. The framework has received a Dark Green rating, the highest grade possible, from CICERO Shades of Green.
Volvo Cars has set a goal of becoming neutral by 2040 across all products and operations through various initiatives including vehicle electrification, as well as through addressing carbon emissions in its manufacturing network and wider operations, its supply chain and through recycling and reuse of materials.
Carla de Geyseleer, Chief Financial Officer, said:
“I am very pleased that we successfully placed our first green bond. The financial community has a critical role to play in supporting sustainable development, including the transition to a low carbon economy. In this respect, it’s very encouraging to see so much investor interest in helping us electrify our fleet and deliver on our climate ambitions.”