Refinancing

The Volkswagen Group’s positive liquidity development continued to determine our refinancing activities in 2011. The Automotive Division in particular had little need for additional capitalization measures on the financial markets. Refinancing instruments that were due were repaid without a need for new issues.

In order to support the Group’s long-term growth in China, Volkswagen issued its first bond in the local currency (renminbi) in May 2011, thus establishing itself on the local finance markets. We also placed a bond of CNY 1.5 billion on the Hong Kong refinancing market with a five-year maturity and achieved a significant price advantage against borrowing in the local currency. The issue proceeds serve to finance our capacity expansion in China.

In 2011, Volkswagen was active in the capital markets for the Financial Services Division with a large number of money and capital market transactions. €5.0 billion was financed through four benchmark bonds and €6.3 billion through asset-backed securities (ABS) transactions in the European region. We supplemented these transactions by a series of private placements, taking advantage of the numerous interest rate and currency opportunities. In all cases, interest rate and currency risks were eliminated by entering into derivative transactions.

In addition, Volkswagen expanded its capital activities in the North American refinancing market. In March 2011, the Group issued its second major bond on the US market and again took advantage of the attractive price conditions. The volume of USD 2.7 billion is the largest transaction for the Company to date in a non-European capital market. Additionally, three ABS transactions in the total amount of USD 3.1 billion were executed.

Volkswagen placed bonds worth CAD 500 million in the Canadian capital market in an attractive market environment. Volkswagen will also drive forward the diversification of its refinancing in the future in order to use good terms to provide financial support for the Group’s growth.

The following overview provides information about the utilization of our money and capital market programs as of December 31, 2011 and illustrates the financial flexibility of the Volkswagen Group:

On July 28, 2011, Volkswagen AG successfully replaced its previous syndicated credit line with a new facility amounting to €5.0 billion that runs until July 2016 – including two options to extend this by a year in each case. The tender was close to two times oversubscribed, and the credit line remains unused. Syndicated credit lines worth a total of €4.6 billion at other Group companies have also not been drawn down. In addition, Group companies arranged bilateral credit lines with national and international banks in various other countries for a total of over €32.9 billion, of which €15.4 billion has not been drawn down. These extensive financing measures ensure the solvency of the Volkswagen Group at all times.