Daimler AG (ticker symbol DAI) has issued its first Green Bond to support CO2-neutral technologies and services. The benchmark Eurobond had a volume of €1 billion, a term of 10 years and an annual coupon of 0.75%. It was more than 4-times oversubscribed. The issuance was arranged by BBVA, BNP Paribas, Commerzbank, Crédit Agricole, SEB and Unicredit.
“CO2-neutral mobility and production is a clear goal and an integral part of our sustainable business strategy,” said Harald Wilhelm, Member of the Board of Management of Daimler AG, responsible for Finance & Controlling/Daimler Mobility, and of Mercedes-Benz AG, responsible for Finance & Controlling.
The green bond aligns with the International Capital Market Association’s (ICMA) Green Bond Principles and is guided by the Daimler Green Finance Framework, which was introduced in June 2020. The Framework is a summary of the principles under which Daimler will use green financing instruments. It applies to a broad range of debt instruments such as green bonds, green promissory notes (Schuldscheine), green commercial paper and green loans.
Daimler will allocate the net proceeds from the green financing instruments in accordance with the Framework to develop and produce zero-emission vehicles such as battery-electric (BEV) and fuel-cell electric vehicles (FCEV).
More than 50% of the proceeds will be allocated to the “Clean Transportation” Category. Furthermore, the proceeds may be used, for example, to upgrade manufacturing facilities or construct new facilities to produce zero-emission vehicles and their drivetrains, and to establish the recycling of batteries and fuel cells.
One example among others is Factory 56, where the all-new S-Class is assembled. The recently opened zero-carbon factory is said to embody the future of production at Mercedes-Benz. Daimler’s Framework obtained “Dark Green”, the highest rating of CICERO, a leading provider of independent, research-based evaluations of green finance frameworks. (see Second Party Opinion)
“The proceeds of our first green bond will be used exclusively for financing green projects, enabling the transformation towards a carbon-free company and industry. The strong demand for our green bond demonstrates the attractive conditions as well as the confidence of investors in our strategy,” Wilhelm said.