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Svensk floats renminbi bonds for Volvo; first Nordic financing of local operations in China
By Marisa Wong
Madison, Wis., Jan. 10 - AB Svensk Exportkredit announced it has issued RMB 200 million of three-year bonds. Svensk will lend proceeds from the issuance to Volvo (China) Investment Co. Ltd.
Svensk's interest rate is 2.4%. The investors are based in mainland China, Hong Kong and Singapore.
Citics Securities was the lead manager for the offering.
This is the first issue of renminbi-denominated bonds for long-term financing of a Swedish exporters' local operations in China, according to a news release.
"Until now, Swedish companies operating in China have been able to get access to local-currency funding from banks in China, but it has been expensive and often not for longer periods than up to a year. Swedish companies are in China to stay, and it is [Svensk's] experience that they also want part of their financing to be long-term, and in local currency, in order to better match the nature of their operations," Miriam Bratt, executive director at SEK, said in the release.
"The transaction is a breakthrough which means that [Svensk] will be able to offer long-term financing in local Chinese currency to other Swedish exporters as well. It will be an important competitive advantage for them," added Hakan Lingnert at Svensk.
According to the release, a few foreign companies have already filed and received approval for financing of their own operations in China, but this is the first time a Nordic financial institution carries out such a transaction on behalf of a company.
Volvo is a vehicle maker based in Gothenburg, Sweden. The lender to Sweden's export industry is based in Stockholm.
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