Annual Report 2017

Refinancing

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 €50 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.

In the year under review, 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 B.30)

In the Chinese market, Daimler placed four so-called panda bonds with a total volume of CNY 16.0 billion. In addition, a large number of smaller bonds were issued in various currencies and markets.

Daimler also issued small volumes of commercial paper in 2017.

In 2017, asset-backed securities (ABS) were issued in two new countries in addition to the already established ABS platforms in the United States, Canada, China and Germany.

In the United Kingdom, ABS of GBP 0.4 billion were successfully placed with investors, while the volume of the first transaction in Australia was AUD 0.75 billion. In the United States, a total refinancing volume of $4.7 billion was generated in 2017 in three transactions, and CAD 0.4 billion was generated in a transaction in Canada. In addition, Mercedes-Benz Bank sold €1.1 billion worth of ABS bonds to European investors through the Silver Arrow platform. In China, two ABS transactions with a total volume of CNY 10.2 billion were successfully placed.

Bank credit was another important source of refinancing in 2017. Loans were provided by globally active banks as well as by nationally operating banks. The lenders also included supra­national banks such as the European Investment Bank and the Brazilian Development Bank (BNDES).

In order to secure sufficient financial flexibility, Daimler concluded a €9 billion syndicated credit facility with a consortium of international banks in September 2013. This provides the Group with financial flexibility until the year 2020. More than 40 European, American and Asian banks participated in the consortium. Currently, Daimler does not intend to utilize the credit line.

At the end of 2017, Daimler had not utilized short- and long-term credit lines totaling €21.0 billion (2016: €18.1 billion). They include the 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.29. At December 31, 2017, they are mainly denominated in the following currencies: 43 % in euros, 25 % in US dollars, 8 % in Chinese renminbi, 4 % in Canadian dollars, 4 % in British pounds and 3 % in Japanese yen.

At December 31, 2017, the total of financial liabilities shown in the consolidated statement of financial position amounted to €127,124 million (2016: €117,686 million).

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

B. 29 Refinancing instruments

  Average interest rates Carrying values
  Dec. 31,
2017
Dec. 31,
2016
Dec. 31,
2017
Dec. 31,
2016
  in % In millions of euros
         
Notes/bonds and liabilities from ABS transactions   1.88 1.64   78,110 73,648
Commercial paper   2.64 2.71   1,045 1,701
Liabilities to financial institutions   3.06 2.96   34,555 29,674
Deposits in the direct banking business   0.42 0.65   11,460 11,642

B.30 Benchmark issuances

Issuer Volume Month of emission Maturity
       
Daimler Finance
North America LLC

US$1,400 millionn

Jan. 2017

Jan. 2020
Daimler Finance
North America LLC

US$850 million

Jan. 2017

Jan. 2022
Daimler Finance
North America LLC

US$750 million

Jan. 2017

Jan. 2027
Daimler AG €1,250 million Feb. 2017 Feb. 2025
Daimler Finance
North America LLC

US$500 million

May 2017

Nov. 2018
Daimler Finance
North America LLC

US$1,250 million

May 2017

May 2020
Daimler Finance
North America LLC

US$250 million

May 2017

Jan. 2022
Daimler AG €1,250 million Jun. 2017 Jul. 2024
Daimler AG €1,500 million Jun. 2017 Jul. 2024
Daimler AG €1,300 million Jun. 2017 July 2037
Daimler AG €1,000 million Nov. 2017 Nov. 2027
Daimler Finance
North America LLC

US$1,500 million

Nov. 2017

Feb. 2021
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