Volvo Cars’ financial leasing subsidiary secures first RMB sustainability-linked syndicated loan in China

Shanghai (Gasgoo)- Volvo Cars' subsidiary, Sixiangjia Financial Leasing (Shanghai) Co., Ltd. ("Sixiangjia"), has successfully signed its first domestic RMB sustainability-linked syndicated loan at Volvo Cars' Asia Pacific headquarters, according to a post on Volvo Cars' WeChat account. The loan, amounting to 650 million yuan, has a term of two years.

The syndicate is led by ANZ, Commerzbank, and Sumitomo Mitsui Banking Corporation, with Fubon Bank acting as the lead arranger. China Chengxin Green Finance ("CCXGF") is serving as the professional evaluation agency for ESG performance targets.

A syndicated loan involves two or more banks providing funds under the same loan contract and conditions. Sustainability-linked syndicated loans (SLLs) are an innovative financing tool that has emerged in response to global climate change and the push towards carbon neutrality. These loans are linked to the borrower's ESG strategy, with sustainability performance targets (SPTs) set to drive improvements. In this case, Sixiangjia’s SPTs focus on a low-carbon economy and corporate social responsibility, tying loan conditions to performance in these areas, thereby encouraging the company to pursue sustainable business practices. This move also supports Volvo Cars' ESG goals in China.

Sustainability is as fundamental to Volvo Cars as safety, with the company aiming for net-zero greenhouse gas emissions by 2040. Sixiangjia is actively aligning with Volvo Cars' global strategy by adopting comprehensive electrification and sustainability goals. The successful signing of this first SLL marks a significant milestone in Sixiangjia's green development journey. Moving forward, Sixiangjia plans to integrate its ESG development strategy into its leasing business, offering full lifecycle financial services for automotive consumers, fostering an open and connected financial ecosystem, and continuously fulfilling its corporate social responsibility in areas such as promoting new energy vehicles, supporting the circular economy for used cars, and focusing on employee development.

Founded in 2019, Sixiangjia is the only entity within the Volvo Cars system with financial leasing qualifications and plays a crucial role in Volvo Cars' aftermarket and value chain. Since its inception, Sixiangjia has not only provided flexible automotive usage solutions for customers but also diversified leasing services that have significantly contributed to the sales growth of Volvo models in mainland China. The issuance of this sustainability-linked syndicated loan represents a new financing approach, providing Sixiangjia with a more diverse and stable funding base. It will enable Sixiangjia to play an even greater role in Volvo Cars' value chain, ensuring the long-term growth of Volvo’s financial leasing business and its ongoing development in the Chinese market.