BMW Tapped $3.6 Billion in Federal Reserve Funds During Crisis
BERLIN - BMW AG secured funds from the U.S. Federal Reserve during the financial crisis to boost liquidity as other sources dried up, reported Bloomberg.
BMW's largest transaction under the Fed's Commercial Paper Funding Facility was for $3.62 billion on Jan. 30, 2009, according to data released yesterday. BMW made “intermittent” use of the Fed program for refinancing at a time when other forms of credit were frozen, Mathias Schmidt, a spokesman for the Munich-based automaker, said today.
“We tapped into this program in 2008 and 2009 during the financial crisis like other companies,” said Schmidt. “It supported our financial profile and offered us an additional funding source, especially at times when the money markets and capital markets did not function properly and efficiently.”
The maker of BMW, Mini, and Rolls-Royce autos spent $750 million to expand its factory in South Carolina to assemble the X3 medium SUV. The plant, which also makes the X5 and X6 SUVs, exports vehicles to more than 120 countries, including Germany and China. Last year, the U.S. was BMW's second-largest market after Germany, accounting for 19 percent of deliveries.
“The BMW Group weathered the economic and financial crisis very successfully,” and even generated positive free cash flow in 2009, “when most other auto companies suffered a lot,” said Schmidt. “The diversified and international treasury operations helped to deal with these challenges.”
BMW recorded an adjusted free cash flow of nearly 1.5 billion euros ($2 billion) last year, as net income declined to 204 million euros, its lowest profit in a decade.
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