GREEN BONDS

IMPROVING AIR QUALITY WITH LOANS FOR NEWER CARS

Texas does not comply with federal air quality standards. To scale the reach of the On the Road Lending initiative, which provides a way for working families to purchase environmentally beneficial vehicles, Champion is preparing a green bond issuance for the market. We expect that this offering will be a tax-exempt bond, issued in a public-private partnership with a Texas municipality, county or state agency. The bond would be an auto loan asset-backed security, ring-fenced for an environmentally beneficial project.

Toyota Financial Services completed two large auto loan-ABS green bonds to provide capital for loans on hybrids. These were corporate taxable bonds. Champion’s green bonds would be similar, covering both highly fuel-efficient gas engines and hybrids. We expect our green bonds to be tax exempt and smaller in size.