Mercedes 2010 Annual Report Download - page 97

Management Report | Liquidity and Capital Resources | 93
Refinancing
To cover its refinancing requirements, Daimler makes use of
a broad spectrum of various financing instruments in the interna-
tional money and capital markets. Daimler needs capital primarily
for the financing of vehicles in the leasing and sales financing busi-
ness. In addition to issuing short-term commercial paper in the
money market, Daimler issues bonds in the capital market in various
currencies with medium and long maturities. They include so-called
benchmark issuances (large bonds with large trading volumes)
as well as low-volume emissions. In addition, bank credit lines
and securitized receivables are also used to cover financing
requirements.
In 2010, the Group covered its liquidity requirements mainly
through the issuance of bonds and with bank loans. Due to the
positive development of cash provided by operating activities, the
funding requirement was significantly lower than in 2009.
To a very small extent, funds were also raised by issuing commer-
cial paper. Furthermore, the still high level of customer deposits
at Mercedes-Benz Bank was used as an additional source of
finance.
For raising longer-term capital in the capital market, various
programs are available such as the €35 billion multi-currency
multi-issuer euro medium-term note program, under which the
following euro benchmark bonds were successfully placed on the
market in 2010:
Amount in
billions of euros
Term in
years Maturity
1.0 3.5 July 2013
1.0 7.0 January 2017
In order to diversify our refinancing, we made smaller private
placements in the euro market and issued bonds in the local mar-
kets of South Africa, Mexico, Argentina and Thailand. And in
April 2010, the Group successfully placed an ABS transaction in
an amount of US$1.0 billion with investors in the United States;
in this context, Daimler made use of its US platform, Mercedes-
Benz Auto Receivables Trust.
At the end of 2010, Daimler had short-term and long-term credit
lines totaling €24.0 billion (2009: €21.1 billion), of which €9.4
billion (2009: €0.8 billion) was not utilized. These included a new
syndicated credit facility arranged with a consortium of
international banks in volume of €7 billion with a maturity of five
years. That credit facility was significantly over-subscribed. After
signing the new credit line, Daimler prematurely terminated the
two existing syndicated credit lines of US$5 billion and €3 billion.
The carrying values of the main refinancing instruments and the
weighted average interest rates are shown in the table below.
Average interest rates Book value
Dec. 31,
2010
Dec. 31,
2009
Dec. 31,
2010
Dec. 31,
2009
In %
In millions of euros
Bonds/notes 4.58 4.66 26,123 30,095
Commercial paper 4.82 6.48 91 176
Liabilities to banks 4.42 5.04 14,328 13,000
The financial instruments shown in the table above at December
31, 2010 are mainly denominated in the following currencies:
30% in US dollars, 29% in euros, 7% in Japanese yen, 7% in Brazil-
ian real and 5% in British pounds.
At December 31, 2009, the financial liabilities shown in the
consolidated balance sheet, which include customer deposits in
the direct banking business, amounted to €53,682 million
(2009: €58,294 million).
Detailed information on the amounts and terms of financing
liabilities is provided in Notes 24 and 31 of the Notes to the Consol-
idated Financial Statements. Note 31 also provides information
on the maturities of the other financial liabilities.