ERJ staff report (LMH)
Hanover, Germany -- Automotive supplier Continental AG plans to issue US dollar-denominated bonds, the net proceeds of which it intends to use for early repayment of part of the tranche of its outstanding syndicated loan that is scheduled to mature in April 2014.
Continental said in a 10 Sept news release that it plans to issue at least $500 million of the new bonds, which are expected to have a term of seven years. The issue volume, and the terms and conditions of the bonds are expected to be determined over the next few days.
The joint bookrunners for the offering are BofA Merrill Lynch, Credit Agricole CIB, Deutsche Bank, HSBC, J.P. Morgan and RBS and the bonds are expected to be placed initially with qualified institutional investors in Germany and abroad.
"Our additional investments in the US have prompted us to issue a bond in US dollars for the first time. With this step, we are improving the maturity profile of our financial liabilities again at an early stage and benefiting in particular from the currently attractive capital market environment," explained Wolfgang SchÃ¤fer, CFO at Continental.
The bonds planned for issue will be issued in minimum tradable units of USD 150,000. They will be issued by Continental Rubber of America, Corp., USA, and guaranteed by Continental AG and selected subsidiaries. The bonds are expected to be traded on the over-the-counter market (Freiverkehr) of the Frankfurt Stock Exchange.
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Website of Continental