March 26, 2019 / 6:05 PM / a month ago

Volvo raises 600 million euros in second bond deal this year

FILE PHOTO: An electric vehicle charging cable is seen on the bonnet of a Volvo hybrid car in this picture illustration taken July 6, 2017. REUTERS/Phil Noble/Illustration

STOCKHOLM (Reuters) - Volvo Cars has raised 600 million euros ($677 million) via a bond issue on Tuesday, its second this year and which also comes seven months after the Swedish carmaker shelved plans to list on the stock market.

Carmakers like Volvo are facing rising costs for developing electric and driverless cars while they grapple with the fallout from trade wars and an industry downturn.

Volvo said on the Tuesday the bond would mature in April 2024, pay a fixed coupon of 2.125 percent and have an issue price was 99.625, equating to a yield of 2.205 percent and a Euro mid-swap of plus 215 basis points.

The settlement was expected to be April 2 April and the bonds would be listed on the Luxembourg Stock Exchange, Volvo said.

A spokeswoman for Volvo, which is owned by China’s Geely, said the money raised would be used for corporate purposes.

In November, Volvo CEO Hakan Samuelsson had ruled out a bond issue in the short term because of turbulent markets.

Reporting by Esha Vaish in Stockholm. Editing by Jane Merriman

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