Paris - Michelin has placed a three-tranche bond offering valued at $2.9 billion (€2.5 billion), the net proceeds of which will be used for general corporate purposes.
Michelin said the bond offering—comprising tranches with 7-, 12- and 20-year maturities—was oversubscribed, "reflecting institutional investors' confidence in Michelin's credit quality."
The issue supports Michelin's strategy of "actively managing its debt and strengthening its liquidity," and will help diversify the firm's sources of financing, while enhancing its financial flexibility by lengthening the average maturity of its debt.
The settlement of the offering was expected to take place on 3 Sept, once the listing prospectus has received the visa of the French Financial Market Authority (Autorite des Marches financiers — AMF).
The bonds then will be admitted to trading on Euronext Paris.
- The 7-year tranche amounts to $872 million. It will bear a coupon of 0.875% per year and will be issued at 99.099% of the nominal value.
- The 12-year tranche amounts to $1.16 billion. It will bear a coupon of 1.75% per year and will be issued at 99.262% of the nominal value.
- The 20-year tranche amounts to $872 million. It will bear a coupon of 2.5% per year and will be issued at 99.363% of the nominal value.
Michelin said the bonds were rated A- by Standard & Poor's and A3 by Moody's, and both ratings agencies gave the issue an A- rating.