Daimler AG has recently inked a 7 billion-euro ($9.8 billion) credit line to be its liquidity reserve, taking the place of the $5 billion and 3 billion-euro credit lines that will soon expire.
In a statement, CEO Bodo Uebber said that it doesn’t intend to use this five-year revolving credit but that with this credit line, it has secured favorable conditions for the upcoming five years and has received “solid liquidity for the long term.”
The statement further revealed that Daimler signed the transaction with over 30 banks after the deal was “significantly oversubscribed.” According to data compiled by Bloomberg, the facility is being coordinated by Deutsche Bank AG, Societe Generale SA and UniCredit SpA.
The facility pays an initial interest at 60 basis points more than the euro interbank offered rate when it's drawn, compared with a 160 basis-point margin under a credit line it agreed to last year.
A basis point is 0.01 percentage point. Both Standard & Poor's and Fitch Ratings have given Daimler's debt a rating of BBB+ -- the third-lowest investment grade. Meanwhile, Moody's Investors Service gives it an A3 rank, a level higher. [via autonews - sub. required]