Continental places first billion-dollar bond

Continental has placed US dollar-denominated bonds worth US$950 million with institutional investors in Germany and abroad. According to the company, the bonds have a seven year term and are being issued by Continental Rubber of America, Corp., USA, and guaranteed by Continental AG and selected subsidiaries. The annual interest rate will be 4.5 per cent and is substantially lower than the interest rate on the bonds issued by Continental in 2010. Interest will be payable semi-annually in arrears. The proceeds will be used for the early repayment of part of the debts scheduled to mature in April 2014.

“The significant oversubscription is another important sign of confidence in our performance,” explained Continental CFO Wolfgang Schäfer. “With this step, we have taken advantage of the current positive capital market environment to cover our additional investments in the US through the debt capital market,” Schäfer added. 

The bonds are expected to be traded on the open markets of the Frankfurt Stock Exchange and the stock exchanges. They will be issued on September 24, 2012. BofA Merrill Lynch, Credit Agricole CIB, Deutsche Bank, HSBC, J.P. Morgan and RBS act as bookrunners for the offering.