Volvo Cars raised SEK3bn, the equivalent of $325.4 million, from its first Swedish bond issue, which will be used to improve the company’s financial flexibility and diversify its funding sources.
The bond issue follows its successful introduction to the global corporate bond market earlier this year when it raised $560 million in euro bonds.
“As a global company with Sweden as its home market, this step into the Swedish market is a natural one for us to make and enables us to broaden the investor base and fund in our local currency,” said Hans Oscarsson, Chief Financial Officer.
Volvo Cars recently had its corporate rating upgraded by Moody’s Investors Service to Ba2 from Ba3, with a stable outlook, citing its strong operational performance, Oscarsson noted. The automaker also has a corporate rating from Standard & Poor’s of BB with a positive outlook.
Volvo an 11.9% sales increase during November. So far this year, the automaker’s sales in the U.S. are up 19.6%.
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The sales surge has been paced by the success of XC90 sport utility vehicle, which arrived in the U.S. market last year and has benefitted from the steady growth of SUV and trucks in the U.S.
“Volvo posted yet another month of double digit sales growth in the US in November,” said Lex Kerssemakers, president and CEO, Volvo Car USA. “The positive momentum this month was carried by our three top-selling vehicles, the XC90, XC60 and S60, all posting positive sales gains.”
Volvo, which is now a subsidiary of the Chinese carmaker Geely but operates independently, is implementing an $11 billion “transformation plan.”
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The new plan involves the development of its own modular vehicle architecture, a new engine range, global manufacturing capability, a completely renewed product line at the same time the company been working on improving the in safety of its vehicles as well as autonomous driving and connectivity.
Part of that effort includes pushing Volvo “upmarket” in the luxury segment, including an increase in the services offered to vehicle owners.
Volvo is using a new connected-car technology app to provide concierge services. Ideally, there’ll be no need for users to travel to the gas station, for a car wash or for other types of services such as moving the car from one spot to another.
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A pilot concierge program is scheduled to roll out this November in the San Francisco Bay area. It will soon ramp up to allow 300 invited drivers of new Volvo XC90 SUVs and S90 luxury sedans to order services such as remote fuel delivery, valet car cleaning and Volvo maintenance.