Volkswagen offers credit facility to leasing company

Volkswagen AG has provided a €1.5bn
(£1.3bn) credit facility to vehicle management and leasing company
LeasePlan, available for immediate use. The Volkswagen Group, which
owns a 50 per cent stake in LeasePlan, made the facility available
through subsidiary Volkswagen International Payment Services.

The facility will be offered on a three-year plan, and was
structured by both parties in conjunction with LeasePlan’s other 25
per cent shareholders, Mubadala Development Company and the Olayan
Group.   

LeasePlan has stated its intention to revert to usual debt
capital and financing status when markets return to health, and has
called the facility a temporary measure to offset current
conditions.   

Ratings agency Moody’s is currently reviewing LeasePlan for a
possible ratings downgrade, following a downgrade in LeasePlan’s
credit rating from A to A- by Standard & Poor’s in
October.   

LeasePlan has in addition asked the Dutch government to act as
guarantor for €1.5bn (£1.3bn)-worth of medium-term notes which it
plans to issue in order to refinance debt, as its usual funding
route – the interbank market – “is not functioning”, said CFO Guus
Stoelinga. The lessor’s banking licence, which it has held since
1993, will give it access to the Dutch government’s €200bn (£169bn)
credit guarantee scheme, of which it could be one of the first
beneficiaries.

Jason T Hesse