Porsche raises €1bn bonds

 

The German luxury sports car maker Porsche said Thursday it had placed a one-billion-euro ($1.43 billion) bond with institutional investors in Europe, Asia and the Middle East.

Market response to the private placement was good, a Porsche statement said, with investors willing to take up the issue despite a negative impact on bond markets from the US subprime housing market crisis.

"The fact that we were able to place this volume shows that investors have confidence in Porsche," finance director Holger Haerter was quoted as saying.

Proceeds from the operation would be used to refinance Porsche's holdings in the German car giant Volkswagen and to provide liquidity reserves, the maker of the 911 sports car said.

This year, Porsche became the primary shareholder in VW, with a stake of nearly 31 per cent, and has made no secret of its intention to raise its holding to more than 50 percent at term.

In its 2006-2007 fiscal year, Porsche posted a record net profit of 4.242 billion euros, in large part owing to financial mechanisms linked to the value of its VW holding. (AFP)