VW is used to borrowing money from the preferred bond market. But with billions being wiped off its stock market valuation, the bond market is shying away from buying VW bonds forcing the board of directors to borrow using instead a $21 billion dollar bridge loan. This bond issue are being covered by Reuters along with Seeking Alpha.
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 money through its traditionally preferred route of the debt market.
The sources said Volkswagen (VW) hoped its bonds would have returned to more normal levels by next spring, allowing it to issue debt and repay the bridging loan.
The loan and subsequent bond placements will likely cost VW about 150 million euros in coupon payments and fees, one of the sources said, adding to the company's financial burden as a result of the scandal.
More than two months after VW's cheating became public, the company is still trying to identify those responsible and organize (sic) refits for around 11 million vehicles worldwide.
Owners of VW's should not panic. This is not something you can control and you should not rush in to trade or to sell your VW. This will all blow over after the BOD's comes up with a solution to the emissions cheating issue.
The Lombardi Law Firm is handling claims for VW owners in Iowa.
Post a comment
Post a Comment to "VW Bonds Get Slammed Over Cheating Scandal"To reply to this message, enter your reply in the box labeled "Message", hit "Post Message."