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Continental Strives for Further Reduction in Interest Costs by Issuing a New Eurobond

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– Seven-year bond issue of at least ?500 million planned
– Proceeds to be used for early refinancing of one of the bonds issued in October 2010
– Eight-year Eurobond that has been issued in October 2010 to be redeemed early
Continental, the international automotive supplier, tire manufacturer and industrial partner, is aiming to further reduce its interest costs and is planning to issue another benchmark-sized Eurobond. The intention is to issue a bond with a volume of at least ?500 million and a term to maturity of seven years. “We intend to use the proceeds generated by this issue for the early refinancing of the eight-year bond with a coupon of 7.125% issued in October 2010,” said CFO Wolfgang Schäfer of this latest step to further improve the maturity profile of financial liabilities. He also noted that no decision has yet been made regarding the early redemption of the bonds that have also been issued in October 2010 with a coupon of 6.5% and a term of six years.
The new bond is to be issued under the debt issuance program and is to be placed with both institutional and private investors. The joint bookrunners for the transaction are Bank of America, Merill Lynch, Commerzbank AG, Credit Agricole CIB, DZ Bank AG, Mediobanca and The Royal Bank of Scotland. The bond is to be issued in denominations of ?1,000 and listed on the regulated market of the Luxembourg Stock Exchange.
In addition, Continental has called today the Eurobond (ISIN DE000A1A1P25) issued in October 2010 by Conti-Gummi Finance B.V. with a coupon of 7.125% and a nominal volume of ?625 million for early redemption. This bond will be redeemed early on November 8, 2013, five years before its original maturity. The redemption price is 103.563%. The corresponding call notice has been sent today to the joint representative and the clearing system for notification to the bondholders.
Continental set up a debt issuance program with a total volume of ?5 billion in May of this year. This enables Continental to respond even more flexibly to market developments and to place short, medium, and long-term bonds on the capital market quickly. Continental already issued a five-year Eurobond with a nominal volume of ?750 million and a coupon of 3% under this program in July.
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With sales of ?32.7 billion in 2012, Continental is among the leading automotive suppliers worldwide. As a supplier of brake systems, systems, and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires, and technical elastomers, Continental contributes to enhanced driving safety and global climate protection. Continental is also an expert partner in networked automobile communication. Continental currently has approximately 175,000 employees in 46 countries.