PARIS — Group Michelin has placed a three-tranche bond offering valued at $2.9 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 helps diversify the firm's sources of financing and enhance its financial flexibility by lengthening the average maturity of its debt.
The settlement of the offering is expected to take place on Sept. 3, once the listing prospectus has received the visa of the French Financial Market Authority (Autorité des Marchés 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 percent per annum and will be issued at 99.099 percent of the nominal value.
The 12-year tranche amounts to $1.16 billion. It will bear a coupon of 1.75 percent per annum and will be issued at 99.262 percent of the nominal value.
The 20-year tranche amounts to $872 million. It will bear a coupon of 2.5 percent per annum and will be issued at 99.363 percent 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.