Continental places 750 million euro bond
Continental AG has placed a 750 million euro Eurobond with institutional and retail investors. According to the company, the aim of the move is to reduce the firm’s interest costs. The bond issued by Continental under its Debt Issuance Program established in May has a term of seven years and an interest rate of 3.125 per cent per annum. Interest will be payable annually in arrears. The issue price is 99.228 per cent.
The bond is expected to be issued on 9 September 2013. It will be listed on the Regulated Market of the Luxembourg Stock Exchange. Bank of America Merrill Lynch, Commerzbank AG, Credit Agricole CIB, DZ Bank AG, Mediobanca and The Royal Bank of Scotland act as joint bookrunners on that transaction. Continental reports that the proceeds generated by this issue will be used for the early redemption of the eight-year bond issued in October 2010.
The Eurobond issued by Conti-Gummi Finance B.V. with a coupon of 7.125 per cent and a nominal volume of €625 million will be redeemed early on 8 November 2013, five years before its original maturity. The redemption price is 103.563 per cent. The corresponding notification has been sent today to the joint representative and the clearing system for notification to the bondholders. No decision has yet been made regarding the early redemption of bonds that have also been issued in October 2010 with a coupon of 6.5 per cent with a six-year term.
Continental set up a debt issuance program with a total volume of 5 billion euros in May of this year. According to the company, 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 euros and a coupon of 3 per cent in July.