Refinancing

The funds raised by Daimler in the year 2019 primarily served to refinance the leasing and sales-financing business. For that purpose, Daimler made use of a broad spectrum of various financing instruments in various currencies and markets. They include bank loans, commercial paper in the money market, bonds with medium and long maturities, promissory-note loans, customer deposits at Mercedes-Benz Bank, and the securitization of receivables from customers in the financial services business (asset-backed securities).

B.32 Refinancing instruments

  Average interest rates Carrying values
  Dec. 31,
2019
Dec. 31,
2018
Dec. 31,
2019
Dec. 31,
2018
    in %   In millions of euros
Notes/bonds and liabilities from ABS transactions 2.03 2.24 99,557 88,942
Liabilities to financial institutions 2.68 3.73 39,811 39,400
Deposits in the direct banking business 0.50 0.58 13,119 11,774

Various issuance programs are available for raising longer-term funds in the capital market. They include the Euro Medium Term Note program (EMTN) with a total volume of €70 billion, under which Daimler AG and several subsidiaries can issue bonds in various currencies. Other local capital-market programs exist, which are significantly smaller than the EMTN program. Capital-market programs allow flexible, repeated access to the capital markets.

The monetary policy of the central banks also affected the situation in the bond markets significantly in the reporting period. The high volumes of available liquidity meant that risk premiums for companies with investment-grade credit ratings largely remained moderate.

In the year under review, the Group covered its refinancing requirements mainly through the issuance of bonds. A large proportion of those bonds were placed in the form of so-called benchmark issuances (bonds with high nominal volumes) in the US dollar and euro markets. (See table B.33)

B.33 Benchmark issuances

Issuer Volume Month of emission Maturity
Daimler International Finance B.V. €1,500 million Feb. 2019 Feb. 2023
Daimler International Finance B.V. €1,000 million Feb. 2019 Jun. 2026
Daimler AG €750 million Feb. 2019 Feb. 2031
Daimler Finance North America LLC US$1,900 million Feb. 2019 Feb. 2022
Daimler Finance North America LLC US$600 million Feb. 2019 Feb. 2024
Daimler Finance North America LLC US$500 million Feb. 2019 Feb. 2029
Daimler AG €750 million Aug. 2019 Feb. 2024
Daimler AG €1,000 million Aug. 2019 Nov. 2026
Daimler AG €750 million Aug. 2019 Feb. 2030
Daimler AG €500 million Aug. 2019 Aug. 2034
Daimler Finance North America LLC US$1,500 million Aug. 2019 Feb. 2022
Daimler Finance North America LLC US$1,250 million Aug. 2019 Aug. 2022
Daimler Finance North America LLC US$750 million Aug. 2019 Jun. 2024
Daimler Finance North America LLC US$500 million Aug. 2019 Aug. 2029
Daimler International Finance B.V. €1,750 million Nov. 2019 Nov. 2023
Daimler International Finance B.V. €1,250 million Nov. 2019 Mai. 2027
Daimler AG €1,000 million Nov. 2019 Nov. 2031

In the Chinese market, Daimler placed four so-called panda bonds with a total volume of CNY 10.0 billion. In addition, a large number of smaller bonds were issued in various currencies and markets.

Daimler also issued small volumes of commercial paper in 2019.

In 2019, asset-backed securities (ABS) were issued in five countries worldwide. In the United States, a total refinancing volume of USD 8.7 billion was generated in six transactions, and in Canada, a total volume of CAD 1.0 billion in two transactions. In Australia, two transactions were conducted in a total volume of AUD 1.26 billion. For the first time, €0.5 billion was successfully placed with investors in Italy. Furthermore, an ABS transaction with a volume of CNY 8.5 billion was placed in China.

Bank credit was another important source of refinancing in 2019. Loans were provided by globally active banks as well as by nationally operating banks. The lenders also included supranational banks such as the European Investment Bank and the Brazilian Development Bank.

Since July 2018, Daimler has had at its disposal a syndicated credit facility with a volume of €11 billion from a consortium of international banks. After the exercise of an extension option of one year beyond the original term, it grants Daimler additional financial flexibility until 2024. The term can be extended for another year until 2025. Daimler does not intend to utilize the credit line.

At the end of 2019, Daimler had unutilized short- and long-term credit lines totaling €28.1 billion (2018: €26.8 billion).

The carrying values of the main refinancing instruments and the weighted average interest rates are shown in table B.32. At December 31, 2019, they are mainly denominated in the following currencies: 42 % in euros, 27 % in US dollars, 8 % in Chinese renminbi, 4 % in British pounds, 3 % in Canadian dollars and 3 % in Japanese yen.

At December 31, 2019, the total of financial liabilities shown in the consolidated statement of financial position amounted to €161.8 billion (2018: €144.9 billion).

Detailed information on the amounts and terms of the main items of financing liabilities is provided in Notes 24 and 33 of the Notes to the Consolidated Financial Statements. Note 33 of the Notes to the Consolitdated Financial Statements also provides information on the maturities of the other financial liabilities.

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