HANNOVER, Germany (July 6, 2010) — Continental A.G. is planning to offer euro-denominated benchmark bonds valued at at least $625 million to European investors in the coming weeks as part of a refinancing package.
The bonds will be issued by Conti-Gummi Finance B.V. in the Netherlands in minimum denominations of $62,500, Conti said, and will be guaranteed by Continental A.G. and selected subsidiaries of the company.
Proceeds of the issue will be applied for partial early retirement of the syndicated loans taken out for the $16 billion acquisition in September 2007 of automotive electronics systems supplier VDO Automotive from Siemens A.G. in 2007.
The bond will have a maturity of no less than five years, Conti said. A final decision on the volume and conditions will be made upon conclusion of an investor road show.
Conti said it has mandated a bank consortium led by Citi and Royal Bank of Scotland to offer and sell euro-denominated notes to qualified investors internationally. The consortium also includes Commerzbank, Deutsche Bank, ING, Landesbank Baden-WÃ¼rttemberg and UniCredit Bank.
The bonds will not be offered for sale to individuals in Australia, Canada, Japan or the U.S. or in “any jurisdiction to whom or in which such offer or solicitation is unlawful,” Conti said.
“The continuing positive trend on automotive markets as well as the current situation on financial markets enables us to move ahead with the refinancing strategy we initiated in 2009,” said Continental CFO Wolfgang SchÃ¤fer. “This first placement of a euro benchmark bond will further improve our debt maturity profile.”