Daimler cutting borrowing costs with a 7 billion-euro refinancing

Article by Christian A., on September 26, 2010

Sources reveal that Daimler AG is reducing borrowing costs with a 7 billion-euro ($9.4 billion) credit line to refinance debt. Daimler, which owns the Mercedes-Benz and Maybach nameplates, is in a better position to negotiate for better terms due to the increasing sales in the US and China. In July, the carmaker raised its 2010 operating profit forecast to 6 billion euros from 4 billion euros.

The sources added that lenders are being offered an initial interest margin at 60 basis points more than benchmark lending rates for the five- year revolving credit.

Bloomberg data show that last year, there had been a margin of 160 basis points for a credit line it agreed last year. The sources said that lenders were offered a 15 basis-point fee if it uses more than one-third of the credit line, and 30 basis points if it uses more than two-thirds.

They said that the facility also pays a commitment fee equivalent to 35% of the interest margin, which will change depending on Daimler's credit rating.

A basis point is 0.01 percentage point. Daimler has yet to comment on this report though. Bloomberg data also indicate that Deutsche Bank AG, Societe Generale SA and UniCredit SpA are coordinators of the refinancing.

Standard & Poor's and Fitch Ratings rank Daimler's debt BBB+, the third-lowest investment grade. However, Moody's Investors Service rates it a level higher at A3. [via Bloomberg]

Topics: daimler

If you liked the article, share on:

Comments

Recommended

What has BMW been up to lately? The company recently announced that they are currently focusing on electrification, and so far, their new architecture will enable “electrification of every model...
by - July 26, 2017
A couple of days ago, Ford came out with their pursuit-rated F-150 Police Responder, and we were quite impressed with what it has to offer. And we are pretty sure...
by - July 26, 2017
Aside from fronting Honda’s annual summer tour, pop rock band OneRepublic was also given an opportunity to customize a 2017 Honda Civic Type R. The car is a one-off and...
by - July 26, 2017
Everyone seems to know that the Alfa Romeo Giulia has been recently experiencing problems. Turns out, the blame goes to Giulia’s software. Reid Bigland, big time executive from Alfa Romeo...
by - July 26, 2017
Romanian automotive media publication cars.ro earlier said that the new Ford Fiesta will no longer be offered in the United States. Robert Stiller, Ford’s vehicle program manager for the B-segment,...
by - July 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries