Why you should borrow on Volkswagen’s $2.8 trillion credit line
A VW stock bond that sells for $12.70 now trades for $1.96.
The company has $2 billion of the debt outstanding, and the company is working on repayment plans.
Volkswagen shares have soared more than 30 percent this year, and it’s now trading above $100.
Volkswagen has said it expects to pay about $1 billion in interest this year.
The credit line allows Volkswagen to repay debts, and its debt can be used to fund long-term loans to suppliers and other companies.
Volkswagen is expected to pay off the debt in about a decade.
The bond can be purchased at $12,000, but it can be redeemed for $15,000 or more.
Volkswagen CEO Martin Winterkorn has said the company plans to pay its debts through a variety of means, including issuing a bond.
But a spokeswoman for Volkswagen said the bond program will not be available until 2018.
The carmaker is working with suppliers and creditors to repay the loans, and said it is also working with the Federal Reserve and U.S. lawmakers to determine how much it owes.
Volkswagen’s credit line will pay off about $2,000 in debt over 20 years, the spokeswoman said.
Volkswagen will pay interest on the debt for about a quarter of a century, according to the company’s bond program.
“The credit line has allowed Volkswagen to invest in new technology and invest in itself, but we are committed to paying our debts,” Winterkern said in a statement last month.
Last year, Volkswagen agreed to pay a record $18.2 billion in $5.4 trillion in new debt.