FRANKFURT (Reuters) -- Volkswagen Group has reached an agreement with banks on the terms of a planned 20 billion euro ($21.2 billion) bridge loan to help it shoulder the costs of its emissions scandals, three people familiar with the matter said.
VW is under pressure to shore up its finances as it faces multi-billion-euro costs of regulatory fines, lawsuits and refits of about 11 million diesel vehicles worldwide. The automaker also faces costs associated with its understating of CO2 ratings on about 800,000 vehicles.
Thirteen banks are offering credit portions of either 1.5 billion euros or 2.5 billion euros each, or a total of 29 billion euros, two of the people told Reuters, declining to be named because the matter is confidential.
One of the people said credit portions would be assigned to banks on Friday. Another person said that would happen in the coming days, without being more specific.
Volkswagen has set aside 6.7 billion euros for the initial costs of the diesel emissions scandal and has said it expects additional expenses of at least 2 billion euros connected to the CO2 emissions scandal.
Analysts have said securing funding from banks in the wake of the scandals, which have wiped billions off the group's market value, would help signal investors that the VW remains a robust borrower.
Standard & Poor's on Tuesday downgraded VW's credit rating to 'BBB+' from 'A-', the latest demotion of the carmaker's credit worthiness following similar moves by peers Fitch and Moody's.
A spokesman for VW declined to comment.