Embattled German carmaker Volkswagen has reportedly reached an agreement with several banks on the terms of a planned multi-billion-euro bridge loan to help it shoulder the costs of its emissions scandal.
The Wolfsburg-based German carmaker secured a total of 29 billion euros ($30 billion) in bridge loans from 13 international banks, the news agency Reuters reported Wednesday, quoting sources familiar with the matter.
The group is expected to sign off on the loans later this week, the dpa news agency quoted VW officials as saying.
The banks were offering credit portions of either 1.5 billion euros or 2.5 billion euros each, two of the people told Reuters, declining to be named because the matter is confidential.
One of the people said credit portions would have maturities of one year, and would be assigned to banks on Friday. Another person said that would happen in the coming days, without being more specific.
Emissions scandal costs
Volkswagen is seeking the loans because financing through corporate bonds has become more expensive after international ratings agencies downgraded VW's creditworthiness in the wake of its emissions scandal.
On Tuesday, Standard & Poor's (S&P) slashed VW's rating from A- to BBB+ joining Moody's and Fitch which had downgraded the carmaker's debt before.
S&P said "risks and related costs continue to expand and deepen, particularly following the recent disclosures regarding the misrepresentation of CO2 emissions and fuel consumption levels."
Volkswagen has been engulfed in the scandal since September, when it admitted more than 11 million diesel vehicles worldwide had "defeat" software designed to cheat on emissions tests. The devices turn on emissions controls when a vehicle undergoes emissions tests, then turn them off under normal operations, allowing illegal amounts of nitrogen oxide to spew into the air.
The world's No. 2 automaker faces regulatory and criminal investigations in several countries, including Germany and the United States, and potentially billions of dollars in fines.
The scandal has widened, with the German automaker subsequently revealing that it had also understated carbon dioxide emissions, including those for gasoline engines, for up to 800,000 vehicles.
uhe/cjc (Reuters, AFP, dpa)