Refinancing

The funds raised by Daimler in the year 2015 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 credits, commercial papers in the money market, bonds with medium and long maturities, customer deposits at Mercedes-Benz Bank and the securitization of receivables from customers in the financial services business (asset backed securities, ABS).

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 €35 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 continued expansive monetary policy of the central banks also affected the situation in the bond markets in the reporting period. The high volumes of available liquidity meant that risk premiums for companies with investment-grade credit ratings remained moderate despite increasingly volatile markets.

In 2015, 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 emissions (bonds with high nominal volumes) in the US dollar and euro markets. (See table B.32)

B.32 Benchmark issuances

Issuer Volume Month of emission Maturity
       
Daimler Finance North America LLC US$250 million Mar. 2015 Mar. 2017
Daimler Finance North America LLC US$1,500 million Mar. 2015 Mar. 2018
Daimler Finance North America LLC US$1,250 million Mar. 2015 Mar. 2020
Daimler Finance North America LLC US$1,050 million May 2015 May 2018
Daimler Finance North America LLC US$1,300 million May 2015 May 2020
Daimler Finance North America LLC US$650 million May 2015 May 2025
Daimler Finance North America LLC US$150 million Aug. 2015 Feb. 2017
Daimler Finance North America LLC US$1,000 million Aug. 2015 Aug. 2017
Daimler Finance North America LLC US$1,000 million Aug. 2015 Aug. 2018
Daimler Finance North America LLC US$850 million Aug. 2015 Aug. 2020
Daimler Finance North America LLC US$500 million Aug. 2015 Aug. 2025
Daimler AG €500 million Sep. 2015 Sep. 2017
Daimler AG €1,000 million Nov. 2015 Mar. 2020

In April and November, Daimler AG placed bonds in the domestic capital market of the People’s Republic of China, so-called panda bonds, with a volume of CNY3.0 billion and CNY2.0 billion. In addition, a large number of smaller bonds were issued in various currencies in the euro market, as well as in Mexico, Brazil, Argentina, Canada, South Africa, Thailand and South Korea.

In addition, Daimler issued small volumes of commercial papers in 2015. 

Furthermore, several asset-backed securities (ABS) transactions were carried out in the United States, Canada and Germany. In the United States for example, five emissions generated a refinancing volume totaling US$5.8 billion. Bonds in a volume of CAN$0.4 billion were issued in Canada. In addition, Mercedes-Benz Bank once again sold ABS bonds in a volume of €1.0 billion to European investors through its Silver Arrow Platform.

Bank credit was another important source of refinancing in 2015. Funds were provided not only by large, globally active banks, but increasingly also by a number of local banks. The lenders included supranational banks such as the European Investment Bank and the Brazilian Development Bank (BNDES). In this way, we continued our diversification in refinancing through banks.

In order to secure sufficient financial flexibility, in September 2013, Daimler concluded a €9 billion syndicated credit facility with a consortium of international banks with a maturity of five years and two extension options of two years in total. This provides the Group with financial flexibility until the year 2020. More than 40 European, American and Asian banks participated in the consortium. Daimler does not intend to utilize the credit line. In 2015, Daimler exercised the option to extend the facility by another year until 2020. All the banks in the consortium participated in the extension.

At the end of 2015, Daimler had not utilized short- and long-term credit lines totaling €18.5 billion (2014: €17.2 billion). They include a syndicated credit facility arranged in September 2013 with a consortium of international banks with a volume of €9 billion.

The carrying values of the main refinancing instruments and the weighted average interest rates are shown in table B.31. At December 31, 2015, they are mainly denominated in the following currencies: 40 % in euros, 30 % in US dollars, 6 % in Chinese renminbi, 5 % in British pounds and 3 % in Japanese yen.

B.31 Refinancing instruments

  Average interest rates Carrying values
  Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014
  in % In millions of euros
Notes/bonds and liabilities from ABS transactions 1.69 1.68 58,789 49,165
Commercial paper 1.35 1.11 2,961 2,277
Liabilities to financial institutions 2.58 3.08 27,311 22,893
Deposits in the direct banking business 0.71 1.06 10,532 10,853

At December 31, 2015, the total of financial liabilities shown in the consolidated statement of financial position amounted to €101,142 million (2014: €86,689 million).

Detailed information on the amounts and terms of financing liabilities is provided in Notes 24 and 32 of the Notes to the Consolidated Financial Statements. Note 32 also provides information on the maturities of the other financial liabilities.

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