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Porsche offers green Schuldschein for EVs

By Silas Brown
25 Jun 2019

Porsche AG, maker of Porsche sports cars, has returned to the Schuldschein market, on the hunt for funds for research and development into electric cars, among other green projects.

BayernLB, ING and LBBW are arranging the transaction, offering investors five, seven and 10 year fixed and floating rate notes. The fixed notes will be priced at 105bp-120bp, 130bp-145bp and in the area of 160bp over mid-swaps. The floating rate note ranges are 10bp tighter, at 95bp-110bp, 120bp-135bp and 160bp over six month Euribor.

The 10bp difference in spreads between fixed and floating rates has been set to compensate for the difference between mid-swaps and six month Euribor, according to a banker familiar with the deal. The aim is to put the fixed and floating rate pricing at equal starting levels, in line with Schuldschein market convention. 

Porsche’s deal is a green transaction. A translation of a section in the term sheet states: “This Schuldschein will be used to finance suitable green projects such as research and development in the field of electromobility and the production of battery-powered vehicles.”

The initial target is €300m, though that could increase if investors show interest.

“This is attractive pricing, unquestionably, and it looks as though Porsche is looking for size,” said a banker following the deal.

Last time Porsche AG was in the market was in February 2018, when it sold one of the tightest transactions of the year. LBBW sold €280m of five, seven and 10 year euro debt at margin ranges of 50bp-60bp, 65bp-75bp and 80bp-90bp.

Almost exactly two years before that Porsche had launched a €200m Schuldschein that grew to €1.1bn after more than 150 investors — just under half of them foreign — bought tickets.

That time, the pricing margins offered by leads LBBW and UniCredit on the three, five and seven year tranches were 120bp-140bp, 140bp-160bp and 160bp-180bp in fixed and floating rates.

By Silas Brown
25 Jun 2019