Mercedes-Benz Becomes First Automotive Company to Issue a Green Panda Bond in China

Mark Segal November 25, 2022

Mercedes-Benz announced today the issuance of a RMB 500 million (€68 million) Green Panda Bond in China, the company’s first green bond offering outside of the European market.

Green Panda Bonds are bonds issued in mainland China by foreign issuers, with proceeds allocated to green projects or assets. According to Mercedes-Benz, the offering marks the first green panda bond issuance by an automotive company.

Mercedes-Benz said that the proceeds from the offering will be used for financing new customer leasing contracts with Battery Electric Vehicles. Last year, the automaker announced plans to electrify its automotive fleet, including a goal to go all-electric by 2030, where market conditions allow. Mercedes-Benz’s Ambition 2039 strategy envisions the company offering a carbon neutral car fleet by the end of next decade.

Earlier this year, the company said that it would increase its use of green and sustainability-linked finance instruments, as it unveiled a new series of climate goals, including plans to cut CO2 emissions per passenger car by more than 50% by 2030.

Steffen Hoffmann, Head of Treasury and Investor Relations of Mercedes-Benz Group AG, said:

“The first Mercedes-Benz Green Panda Bond shows our ambition to further expand our sustainable finance strategy to our important growth regions around the globe.”

The company indicated that demand for the panda green bond was strong, with the offering more than 3x oversubscribed. The bond was issued with a two year term and an annual coupon of 2.9%.

Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.