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Schaeffler Holding refinances bank debt and issues bonds

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– ?3.875 billion refinancing of existing bank loans
– Bank syndicate enlarged
– Financing terms significantly improved
– Bond issuance in Euro and US-Dollar of approx. ?1.5 billion planned
Today, Schaeffler Holding signed a new credit agreement of ?3.875 billion with improved terms. As part of the transaction, Schaeffler Holding intends to issue high yield bonds, consisting of Euro and US-Dollar tranches with an issue size of approximately 1.5 billion Euro equivalent which will immediately be used to prepay parts of the bank loans. Through these measures, cost of debt will be further reduced and the capital structure on the holding level will be significantly improved.
The new credit arrangement was completed by Schaeffler Verwaltungs GmbH, a subsidiary of Schaeffler Holding, and several international banks. The new agreement replaces the existing November 2009 credit financing in full. It includes Term Loans in the amount of ?2.175 billion and a Revolving Credit Facility in the amount of ?200 million, all of which were concluded at significantly improved conditions. The Term Loans have maturities until 2017.
In this context, Schaeffler Holding through its finance subsidiary Schaeffler Holding Finance B.V. intends to place Euro and US-Dollar denominated senior secured bonds of approximately 1.5 billion Euro and a term of five years with institutional investors. The issue size and the final terms will be determined over the next days. Standard & Poor-s and Moody-s will publish their respective ratings for the bonds shortly.?
Background Information on Schaeffler Holding:
In August 2009, the Schaeffler Group had agreed a basic financing concept with its banks in course of which the Group-s liabilities on the holding company level and on the operational level were split. As a result of two refinancing steps in March 2011 and September 2012, the leverage on the company-s holding level was significantly reduced and the financing costs were improved. In parallel, the capital structure on the operating level has been optimized in several steps.
With the new credit agreement on the holding company level concluded today, the course has been set for the further successful financial and strategic development of the Schaeffler Group.
Important Notice
The securities referred to herein will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. State security laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.
This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan, or the United States of America or in any jurisdiction to whom or in which such offer or solicitation is unlawful. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. The offer and sale of the securities referred to herein has not been and will not be registered under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the securities in any jurisdiction.
This document has been prepared on the basis that there was no public offering in connection with this transaction nor will there be a public offering of the securities. No approved prospectus was or will be prepared in connection with this transaction. Any offer of securities in any Member State of the European Economic Area (“EEA”) which has implemented the Prospectus Directive (2003/71/EC), as amended, including any relevant implementing measures to implement the Directive 2010/73/EU, (each, a “Relevant Member State”) will only be made if no prospectus for offers of securities has to be published. Accordingly any person making or intending to make any offer in that Relevant Member State of securities which are the subject of the placement contemplated in this announcement may only do so in circumstances in which no obligation arises for Schaeffler to publish a prospectus pursuant to Article 3 of the Prospectus Directive (as amended by the Directive 2010/73/EU, to the extent such amendments have already been implemented in the Relevant Member State) or supplement a prospectus pursuant to Article 16 of the Prospectus Directive (as amended by the Directive 2010/73/EU, to the extent such amendments have already been implemented in the Relevant Member State), in each case, in relation to such offer. Schaeffler has not authorized, nor does it authorize, the making of any offer of securities in circumstances in which an obligation arises for Schaeffler to publish or supplement a prospectus for such offer.
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Forward-looking statements and projections
Certain statements in this press release are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. No one undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place any undue reliance on forward-looking statements which speak only as of the date of this press release. Statements contained in this press release regarding past trends or events should not be taken as representation that such trends or events will continue in the future. The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that Schaeffler, or persons acting on its behalf, may issue.

Schaeffler Group with its product brands INA, FAG, and LuK is a leading global manufacturer of rolling bearings and linear products as well as a renowned supplier of high-precision components and systems for engines, transmissions and chassis applications to the automotive industry. The Group stands for global customer focus, strong innovative ability and maximum quality. Its 180 locations in more than 50 countries generated sales of approximately ?11.1 billion in 2012. With approximately 76,000 employees worldwide, Schaeffler Group is one of the largest family-owned industrial companies in Germany and Europe.