Mercedes financial unit releases Korean bonds

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Mercedes financial unit releases Korean bonds

Mercedes-Benz Financial Services Korea (MBFSK), a subsidiary of the German automotive group Daimler AG, announced yesterday that it began issuing a new kind of Korean won-denominated bond for the first time on Thursday. The bonds are non-guaranteed and will be offered publicly.

Some 100 billion won ($91.93 million) of the bonds will be made available, each with two-year maturities and a fixed coupon of 3.99 percent per annum, it said. The proceeds will be utilized to finance purchases of Mercedes-Benz vehicles in Korea, it said.

Local credit rating firms such as NICE Investors Service and Korea Rating Corporation have assigned MBFSK a bond rating of A+ with a “stable” outlook.

The agencies cited the company’s strong asset growth, which was driven by increased sales and improved profitability due to low credit losses.

Mercedes-Benz sold 17,276 vehicles in the first 10 months of this year, up 8.7 percent from a year ago. It accounts for 16.04 percent of the imported auto market.

By Joo Kyung-don [kjoo@joongang.co.kr]

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