Schffler succefully concludes .5 billion refinancing

2014-05-08 | 000-005-012 DE-EN

SCHAEFFLER AG, HERZOGENAURACH

Schaeffler successfully concludes 3.5 billion refinancing

2.0 billion of new bonds and 1.5 billion of new institutional term loans successfully placed

All new debt tranches several times oversubscribed

Significant improvement in cost of debt, maturity profile and terms of bonds/loans

International automotive and industrial supplier Schaeffler successfully concluded today its comprehensive 3.5 billion refinancing transaction. As part of the transaction, Schaeffler placed 2.0 billion of new senior secured and unsecured notes and replaced 1.5 billion of institutional term loans with new institutional loan tranches at more attractive terms. All tranches were significantly oversubscribed.

The transaction included the issuance of four new bonds. Besides three secured bond tranches, Schaeffler also issued a debut unsecured bond tranche. The key terms of the bonds are as set out below:

Volume 500 million EUR: 5 years maturity; 2.75% coupon; secured

Volume 500 million EUR: 5 years maturity; 3.25% coupon; unsecured

Volume 500 million EUR: 8 years maturity; 3.50% coupon; secured

Volume 700 million USD: 7 years maturity; 4.25% coupon; secured

The bonds are being issued by Schaeffler Finance B.V. and are guaranteed by Schaeffler AG and selected subsidiaries for the senior secured tranches, and Schaeffler AG only for the senior unsecured tranche. They will be listed on the Euro MTF market of the Luxembourg Stock Exchange. Moody's and Standard & Poor's have rated the senior secured tranches Ba2/BB- and the senior unsecured tranche B1/B.

In addition, Schaeffler successfully placed new term loan tranches with a maturity of six years with institutional investors in the United States of America and in Europe. The key terms of the institutional loans are as set out below:

Volume 375 millionen EUR: 6 years maturity; E+3.00%*; secured

Volume 1,600 million EUR: 6 years maturity; L+3.00%*; secured

* Both with a base rate floor of 0.75 percent

Net proceeds of the bond and loan financing will be used to finance the redemption of existing higher priced notes, such as the 2017 EUR retail bond with a coupon of 6.75 percent and the 2019 EUR and USD debut bonds with coupons of 8.75 percent and 8.5 percent, respectively, to refinance the existing institutional term loans as well as a part of the bank Loan, and for general corporate purposes.

Klaus Rosenfeld, CEO and CFO of Schaeffler AG, said: The successful completion of the transaction is another important step in optimizing our capital structure. With a coupon of 2.75 percent on the secured 5-year Euro bond, we have reached a pricing level which is usually reserved for companies in the investment grade range. The first-time issuance of an unsecured 5-year euro bond with a coupon of 3.25 percent is another proof for the strength of the Schaeffler credit. The comparison with the coupon levels of our debut bonds issued at the beginning of 2012 shows how much progress we have made in improving our capital structure in the last two years.

In addition to the significant reduction in the cost of debt, the refinancing transaction allows Schaeffler to extend and better balance the maturity profile of its financial debt. With the improvement of the loan and bond terms the company also gains additional flexibility for future optimization 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

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