SINGAPORE -- The financial services arm of Europe's largest carmaker Volkswagen AG launched a S$500 million ($287.4 million) multi-currency debt program on Tuesday to provide funds for car buyers in the city state.
Volkswagen, which is tapping the local market for the first time, said the notes would be issued by Volkswagen Financial Services Singapore Ltd. in the local currency, although it may issue in other currencies depending on investor demand after a roadshow that began on Monday.
The company plans to start with short-term notes of up to one year, followed by fixed rate notes with a maturity of three to five years depending on market conditions.
The first tranche of at least S$100 million would be issued in the next two weeks, it said.
Citicorp Investment Bank (Singapore) Ltd. and HSBC Ltd. are the joint lead managers of the issue, which is rated A1 negative by Moody's Investors Service and A stable by Standard & Poor's.
"The strategy behind this is to establish ourselves here in the market as frequent issuers in the capital market business," Bernd Bode, head of treasury for Volkswagen Financial Services AG, told reporters at a press briefing.
Volkswagen Financial Services Singapore Ltd started operations in March 2001 and had total assets of some S$146 million in the year ended December 31, 2002.
Volkswagen also has financial services operations in Asia-Pacific countries such as Japan, Australia and Thailand. It has applied for a licence to set up operations in China.