FILE PHOTO: A Volvo S60 is displayed during the inauguration of Volvo Cars first U.S. production plant in Ridgeville, South Carolina, U.S., June 20, 2018. REUTERS/Randall Hill/File Photo

STOCKHOLM (Reuters) - Sweden’s Volvo Cars has raised some 2 billion Swedish crowns ($215 million) in a bond issue just five months after the Chinese-owned carmaker terminated plans for a stock market flotation, blaming trade tensions and a downturn in the sector.

Carmakers like Volvo face heavy expenditure in developing electric and driverless cars, just as diesel engines fall out of favor and major Chinese and European markets stutter.

Volvo, which is developing electrified performance brand Polestar and owns a stake in parent Geely’s stablemate Lynk&Co, is spending about 5 percent of its annual turnover building electric and autonomous vehicles.

The company, which had 2018 revenue of 252.7 billion crowns and net cash of 18.03 billion, had repeatedly said it would fund the development with internal resources and did not need external help.

But CEO Hakan Samuelsson said this month that external finance was needed to support the development of electric cars and that Volvo was talking to Chinese and U.S. tech investors.

Samuelsson had in late November ruled out Volvo raising funds via a bond offering in the short term, saying it was not the right time because markets were too turbulent.

A Volvo spokesman said the new bond, which matures in February 2023 and pays a floating coupon of STIBOR (Stockholm interbank offered rate) plus 2.30 percent, would be used for general corporate purposes and not for a specific project.

The bond was issued under Volvo’s Euro medium term note program. Handelsbanken, Nordea and SEB acted as bookrunners on the transaction.