Zhejiang Geely Holding Group has raised US$400m to support the development of zero-emission capable vehicles by its UK subsidiary, the London Taxi Company (LTC), maker or the iconic London Black Cab.

The company said it had priced the "first-ever Green Bond" on the offshore market from a Chinese automobile company, raising some US$400m.

The senior unsecured bonds, issued through the wholly-owned subsidiary LTC GB Limited, carry a fixed interest rate of 2.75% per annum with a tenor of five years, which is claimed to be the lowest coupon ever amongst the USD bonds issued by Greater China's auto companies. The final order book of over US$2.3bn represented an oversubscription ratio of close to 6 times, Geely said.

Geely will use the net proceeds from the Green Bond to finance or refinance the design, development and production of zero-emission capable vehicles by LTC. The company is investing GBP300m in LTC's new research and production facility in Ansty in the West Midlands region of the UK to develop the next generation London taxi, the TX5.

The TX5 is a zero-emission capable vehicle and will be launched in the UK at the end of 2017 and in international markets in 2018. Geely said the vehicle will "be compliant with new environmental requirements being introduced in London".

LTC is also working on several zero-emission model concepts, including light commercial vehicles as part of Geely's plans to significantly raise production at LTC and position it as a leading manufacturer of green and environmentally friendly transportation.

"We are delighted with the response of investors to our Green Bond offering," said Yifan Li, CFO of Geely.

Bank of China provided a "Standby Letter of Credit" for the Green Bond.

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