Volkswagen and PSA eyeing loans from European Central Bank
By Julybien, 17 Feb, 2012. 0 Comments
PSA/Peugeot-Citroen Logo
Volkswagen AG and PSA/Peugeot-Citroen are considering joining a number of European companies that have been applying for the European Central Bank’s one-percent three-year loans. The carmakers’ financing units are entitled to borrow from the ECB's longer term refinancing operation (LTRO) as they possess banking licenses. The carmakers hope to add their names to a list of 523 lenders that have already borrowed EUR489 billion of the low-interest loans under the ECB’s program in December. Stefan Rolf, the head of securitization at Volkswagen Bank GmbH, confirmed that the carmaker is considering accessing the LTRO. Peugeot's Banque PSA Finance unit, meanwhile, is currently holding talks with the ECB about a loan and is offering more than EUR1 billion of collateral, according to Chief Financial Officer Jean-Baptiste de Chatillon. Huw Van Steenis, a bank analyst at Morgan Stanley in London, remarked that the auto industry is a significant provider of credit to the economy and the ECB is keen to get credit flowing where it needs to flow. Van Steenis added that if giving loans to carmakers “helps that process,” then the ECB may feel “it's a good use of the money.”
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