Schffler Holding succefully places senior secured notes and refinances bank loans

2014-10-22 | 000-005-367 DE-EN

SCHAEFFLER AG, HERZOGENAURACH

Schaeffler Holding successfully places senior secured notes and refinances bank loans

Total bond volume of approx. 1.2 billion equivalent

Three tranches with 5, 7, and 8 year maturities

Proceeds used to reduce existing credit facilities

Today, Schaeffler Holding successfully placed approx. 1.2 billion equivalent senior secured notes denominated in Euro and U.S. Dollar with institutional investors. Very high demand for the notes in both Europe and the USA led to an oversubscription of several times.

The issue consists of a Euro tranche of approx. 350 million with a maturity of seven years and a coupon of 5.75 percent, a U.S. Dollar tranche of approx. $475 million with a maturity of five years and a coupon of 6.25 percent, and a U.S. Dollar tranche of approx. $675 million with a maturity of eight years and a coupon of 6.75 percent. The notes are issued by Schaeffler Holding Finance B.V. and are guaranteed by Schaeffler Verwaltungs GmbH and selected subsidiaries. The notes will be listed on the Euro MTF market of the Luxembourg Stock Exchange. Standard & Poor's and Moody's have rated the bonds B and B1, respectively.

The issue is part of the comprehensive 1.9 billion partial refinancing of existing bank loans at the level of Schaeffler Holding. Apart from the above mentioned bonds the refinancing comprises a new 700 million credit agreement with six international banks. The net proceeds are used to replace the existing bank loans. Through these measures, the cost of debt on the level of Schaeffler Holding will be further reduced and the maturities extended.

The successful issuance of bonds with a total volume of 1.2 billion in the current volatile capital markets environment is again proof of the great trust that the capital markets place in the Schaeffler Group. With the refinancing at Schaeffler Holding we have reached another milestone on our course to sustainably optimize our capital structure, said Klaus Rosenfeld, Member of the Management Board at Schaeffler Holding.

Background information on Schaeffler Holding:

In August 2009, Schaeffler had agreed a basic financing concept with its banks in course of which the Group's liabilities at the holding company level and at the operating level were split. As a result of four financing steps in March 2011, September 2012, July 2013, and September 2013, the leverage on the company s holding level was significantly reduced and the financing costs were improved. In parallel, the capital structure at the operating level has been optimized in several steps.

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.

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 event

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