Volkswagen Bank GmbH announced on Tuesday that it had successfully placed the first green bond in its history, raising €1.5 billion ($1.72 billion) in a two-tranche deal, as investor demand exceeded €6.6 billion.
The transaction, split between three-year and six-year maturities, was issued under the Green Finance Framework of Volkswagen Financial Services AG, the parent company.
It marked the bank’s inaugural use of the senior preferred format, offering bondholders greater protection in the event of regulatory restructuring.
Strong Investor Appetite
Volkswagen Bank hosted a virtual roadshow ahead of the offering, attracting participation from over 170 investors. Over 300 individual orders were placed across the two tranches, with more than 30 investors engaging in extended discussions.
“We are delighted with the enormous interest investors have shown in our first green bond,” said Oliver Roes, managing director of Volkswagen Bank GmbH. “Sustainability has now also become a fully established part of our refinancing mix in line with our Mobility2030 strategy.”
Proceeds to Fund EV Financing
The bank stated that the proceeds from the bond will be used exclusively to refinance loans and leasing contracts for battery electric vehicles, thereby further supporting the sales of electric models from Volkswagen Group brands.
The issuance reinforces Volkswagen Bank’s role in advancing the Group’s mobility and electrification goals.
Volkswagen Financial Services AG, the bank’s parent company, is a wholly owned subsidiary of Volkswagen AG and handles the Group’s European financial and mobility services.
As of end-2024, Volkswagen Financial Services reported total assets of €192 billion and an operating result of €1.25 billion. It manages a portfolio of approximately 17.9 million active contracts and employs over 10,000 people.
