Industry roundup: 11 September
by Ben Poole
Daimler issues €1 billion green bond
Daimler, a commercial vehicle and premium auto manufacturer (and maker of Mercedes Benz cars), has issued a €1bn green bond, with a term of 10 years and an annual coupon of 0.75%. It was more than 4-times oversubscribed and driven by a high-quality orderbook. The issuance was arranged by BBVA, BNP Paribas, Commerzbank, Crédit Agricole, SEB and Unicredit.
The green bond is in line with the International Capital Market Association’s (ICMA) Green Bond Principles and is guided by the Daimler Green Finance Framework, which was introduced in June 2020. The Framework is a summary of the principles under which Daimler will utilise green financing instruments. It applies to a broad range of debt instruments such as green bonds, green promissory notes (Schuldscheine), green commercial paper and green loans. Daimler will allocate the net proceeds from the green financing instruments in accordance with the Framework to develop and produce zero-emission vehicles such as battery-electric (BEV) and fuel-cell electric vehicles (FCEV), for example.
More than 50% of the proceeds will be allocated to the “Clean Transportation” Category. Furthermore, the proceeds may be used, for example, to upgrade manufacturing facilities or construct new facilities for the production of zero-emission vehicles and their drivetrains, and to establish the recycling of batteries and fuel cells. One lighthouse project among others is Factory 56, where the all-new S-Class is assembled. The recently opened zero-carbon factory embodies the future of production at Mercedes-Benz and sets new standards for the automotive industry. Daimler’s Framework obtained “Dark Green”, the highest rating of CICERO, a provider of independent, research-based evaluations of green finance frameworks.
Daimler will provide a Green Finance Investor Report on an annual basis in order to create transparency for investors and the public regarding the environmental impact of the investments in the financed projects. The use of the proceeds of Daimler’s green bond is in line with its Green Finance Framework. Project details will be revealed in the first Green Finance Investor Report, to be published in the third quarter of 2021.
Mastercard and ADB build multi-stakeholder alliance to digitise supply chains in Asia
Mastercard and its partners N-Frnds, SGeBIZ and Finastra have formed an alliance with the support of the Asian Development Bank (ADB) to create technology solutions to drive greater digital efficiency across the retail supply chain in Asia and increase wholesalers’ access to credit.
The results of the alliance are a technology solution that is designed to provide two key benefits:
1. Wholesaler access to credit: Mastercard will leverage supply chain data from N-Frnds, SGeBIZ’s digital procure-2-pay platform and other sources to partner with Finastra and its Trade Bank customers to automate access to working capital finance. The collaboration will increase the digital data available to assess creditworthiness and create new models to evaluate it. Access to the resulting lines of credit will enable wholesalers to react more quickly to upcoming promotions, increase their inventory levels and build their businesses.
2. Fully digitised marketing campaigns: Through integrating digital payments and supply chain data with promotions, FMCG trade spend can be allocated more efficiently with better visibility and inclusion of SME retailers. The alliance will leverage N-Frnds’ mobile solution - which optimises logistics and operations by connecting FMCG companies with wholesalers for placing orders, coordinating deliveries and monitoring inventory levels - to better communicate upcoming promotional efforts between suppliers and wholesalers.
Ebury and MarketFinance partner to speed up CBILS access ahead of September deadline
As the UK government’s CBILS initiative draws to a close this month, two of the country's fintechs, Ebury and MarketFinance, have joined forces to try to ensure SMEs across the UK are able to quickly access the emergency lending. MarketFinance will offer both its CBILS loans and revolving credit facilities to Ebury’s UK SME base to support them with their business finance needs.
The CBILS initiative will conclude at the end of September 2020 with pre-submitted applications in September being valid until the end of November. Until 30 September, companies can apply for a cash injection through a CBILS loan between £50,001 and £150,000 with no fees, interest or repayments for 12 months. The CBILS revolving credit facility goes up to £5 million and works in much the same way as MarketFinance’s selective invoice finance product, with advances secured against outstanding invoices.
Ebury will add MarketFinance’s CBILS loans and revolving credit facilities, which are both interest free for the first year, to its existing supplier trade finance products meaning clients can access a range of working capital solutions.
While the immediate focus of the partnership is to offer lending products under CBILS terms to Ebury clients, the fintechs say they intend to work together in the long term with Ebury continuing to offer MarketFinance’s regular business loans and invoice finance to their clients, well beyond the end of the CBILS window. The strategic partnership adds to Ebury’s range of cross-border finance options, which are underpinned by its foreign exchange risk management capabilities.
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