BMW taps finance assets in China image

The German automaker, the world’s largest producer of premium autos, has announced it has set up asset-backed securities of 800 million yuan (76.7 million pounds) in China.

The deal is very important for the carmaker, as the finance unit is now allowed to tap the huge potential of China’s domestic capital market, being also the first asset-backed debt issue in what is now the world’s biggest single automotive market.

“Given rising sales volumes in China, the transaction is an important step toward diversifying our refinancing basis in local currency,” BMW said in a statement. “We welcome the new opportunity and play a part in developing the securitisation market in China,” the company added.

The move comes hot on the heels of March’s move from Mercedes-Benz,the third largest premium automaker, which for the first time for a foreign non-financial corporate bond issue on the Chinese financial market, sold a 500 million yuan bond to local investors.

The news of local bonds issues from foreign automakers could flow in regularly now, as the Beijing authorities have relaxed in recent times the limitations on investment funds into and out of the country, while also allowing for a gradual introduction of foreign players into the yuan-denominated domestic market.

Via Bloomberg