Funds News

Volkswagen allocates 20 bln bridge loan to 13 banks - sources

FRANKFURT, Dec 3 (Reuters) - Volkswagen has split a 20 billion euro ($21.1 billion) bridge loan between 13 banks to help shoulder the costs of its emissions scandal, two people familiar with the matter said.

Eight banks which had initially offered tranches of 2.5 billion euros will supply 1.825 billion euros each, while five banks which offered 1.5 billion euros each will provide loans worth 1.08 billion euros, the people said.

Citi, Unicredit, Barclays, Bank of Tokyo-Mitsubishi, BNP Paribas, HSBC, Mizuho , Societe Generale have granted the larger tickets, with Goldman Sachs, Bank of America, Santander, BBVA, Credit Agricole supplying the rest, they added.

VW and the banks declined to comment, except for HSBC, BBVA, Bank of Tokyo-Mitsubishi and Mizuho, which were not immediately available for comment.

Volkswagen, Europe’s largest automaker, is under pressure to strengthen its finances, with analysts expecting it will have to pay out tens of billions of euros to cover fines, lawsuits and vehicle refits after it admitted to cheating U.S. diesel emissions tests and falsifying carbon dioxide emissions.

The biggest corporate scandal in the German company’s 78-year history has forced out its long-time CEO, wiped billions of euros off its stock market value and hammered its bonds - making it much more expensive for the company to borrow through its traditionally preferred route of the debt market.

Sources had told Reuters on Wednesday that Volkswagen had agreed the terms of the bridge loan.

$1 = 0.9474 euros Additional reporting by Jan Schwartz; Editing by Maria Sheahan