Mercedes-Benz Converts Revolving Credit Facility into a Sustainability-Linked Loan

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by KnowESG,

Daimler AG

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Mercedes-Benz Group AG successfully transformed its existing €11 billion Revolving Credit Facility (RCF) into a Sustainability-Linked Loan (SLL). A Revolving Credit Facility is arranged for liquidity backup reasons to secure unforeseen liquidity risks. It enhances overall financial flexibility as required by rating agencies to support its investment grade ratings.

Mercedes-Benz is committed to sustainability as the company plans to go all-electric by the end of the decade, wherever market conditions allow. The integration of sustainability principles underlines Mercedes-Benz’s commitment to continuously improve its sustainability strategy through Key Performance Indicators (KPIs), which are selected using the Mercedes-Benz materiality analysis.

The KPIs focus directly on the most pressing ESG (Environment, Social, Governance) issues: ‘climate protection’ and the contribution of Mercedes-Benz to reducing its CO2 footprint. One example of the KPI is the worldwide share of fully electric vehicles in the Mercedes-Benz fleet. If Mercedes-Benz meets the chosen goals for sustainability, the SLL commitment fee will go down.

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

"Our path towards a CO2-neutral future has been set out clearly with our Ambition 2039. We will therefore align our sustainable business strategy with our financing instruments and transform our existing Revolving Credit Facility into a Sustainability-Linked Loan. This follows our previous two green bond issues in 2020 and 2021 and positions Mercedes-Benz as a leader in the field of sustainable finance."

The transaction was structured by Skandinaviska Enskilda Banken AB (PUBL), Frankfurt Branch (SEB), and Landesbank Baden-Württemberg (LBBW) as sustainability advisors.

Jürgen Baudisch, CEO and Country Head of SEB DACH, said:

"We are proud to work with Mercedes-Benz Group again on this sustainable finance transaction, which helps them share their ambitious sustainability strategy. This facility affirms its position as one of the corporate leaders in sustainable finance. We are pleased to have been able to add value with our many years of experience and expertise in this field as well as in the automotive industry."

Source: Mercedes-Benz

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