Volkswagen Bank launches first-ever green bond

In a major milestone for its sustainability journey, Volkswagen Bank GmbH has successfully issued its first green bond, raising €1.5 billion through dual tranches with maturities of three and six years. The debut transaction marks a premiere for the bank in the green finance arena and demonstrates the growing integration of sustainability into its refinancing strategy.

The issuance, conducted under the Green Finance Framework of parent company Volkswagen Financial Services AG, attracted extraordinary market interest. Total demand peaked at €6.6 billion, with over 300 orders placed by investors across both tranches.

“We are delighted with the enormous interest investors have shown in our first green bond,” said Oliver Roes, Managing Director of Volkswagen Bank GmbH.

“Sustainability has now also become a fully established part of our refinancing mix in line with our Mobility2030 strategy.”

A notable feature of the bond is its “senior preferred” format, offering enhanced investor protection by positioning the instrument higher in the creditor hierarchy in case of regulatory restructuring. This structure was applied for the first time in Volkswagen Bank’s capital market activities.

Proceeds from the green bond will be used exclusively to refinance financing products for battery electric vehicles (BEVs). This aligns with Volkswagen Group’s broader efforts to accelerate the transition to e-mobility and reduce carbon emissions in line with global climate goals.

During the marketing phase, Volkswagen Bank held a virtual investor roadshow attended by over 170 institutional investors, with more than 30 engaging in direct discussions. The strong engagement reflects investor confidence in the bank’s sustainable strategy and the long-term prospects of green mobility.