FILE PHOTO: A Volvo S60 is displayed during the inauguration of Volvo Cars first U.S. production plant in Ridgeville, South Carolina, U.S., June 20, 2018. REUTERS/Randall Hill/File Photo
STOCKHOLM (Reuters) – Sweden’s Volvo Cars issued a bond worth 2 billion Swedish crowns ($214.65 million), it said on Wednesday, just five months after the Chinese-owned carmaker terminated plans to list itself blaming trade tensions and a downturn in automotive stocks.
The funds from the bond sale add to Volvo’s coffers at a time when carmakers need cash to develop electric and driverless cars and also face mounting costs from a prolonged U.S.-China trade war and slowdown in large auto markets China and Europe.
Volvo, which is developing Polestar as an electrified performance brand and owns a stake in Chinese owner Geely’s stablemate Lynk & Co, has repeatedly said it will finance electric and autonomous vehicle development from existing cash flows.
The new bond, which matures in February 2023 and pays a floating coupon of STIBOR plus 2.30 percent, will be used for general corporate purposes and not for a specific project, a Volvo spokesman said on Wednesday.
The bond was issued under Volvo’s Euro Medium Term Note program and Handelsbanken, Nordea and SEB acted as bookrunners on the transaction.
Reporting by Esha Vaish in Stockholm; Editing by Kirsten Donovan