January - March

Porsche successfully issues two bondsSports car manufacturer optimizes long-term liquidity position

Stuttgart. Dr. Ing. h.c. F. Porsche AG, Stuttgart, has successfully placed two bonds in the market via its finance subsidiary “Porsche International Financing plc” based in Dublin/Ireland. Porsche AG is to act as guarantor for each of the two bonds. Part of the issue involves a Eurobond for EUR 2 billion, where two separate tranches of EUR 1 billion have maturities of five and ten years respectively. The five-year maturity carries an interest coupon of 3.5 percent p.a., the ten-year maturity an interest coupon of 3.875 percent. A hybrid bond denominated in US dollars of USD 1 billion with perpetual maturity was also issued. The bond bears interest of 7.2 percent. Under IFRS international accounting standards, hybrid bonds are recognized in equity, and will therefore strengthen the Porsche Group’s equity base. Porsche can also use the bond as a currency-hedging instrument.

Both bonds have generated extraordinarily high levels of demand from investors and each was many-times oversubscribed. This is all the more remarkable as Porsche currently has no rating, meaning that the high demand for the bonds reflects the sports car manufacturer’s excellent reputation in the international finance markets.

Holger P. Härter, Chief Financial Officer of Porsche AG remarked: “In light of the overwhelmingly high demand shown by investors and the remaining low interest rates in the euro zone, we took the opportunity to issue high volumes. The new bonds not only optimize our structural liquidity, they also guarantee – totally in line with our conservative financing strategy – a consistent, comfortable liquidity cushion for the Company.”