Third Conti Eurobond placed under debt issuance programme
Continental has placed another €750 million Eurobond with institutional and retail investors; the company says it chose to do so in order to take advantage of “the current positive capital market environment as well as the momentum of its previous bond transactions.”
The bond issued by Conti-Gummi Finance B.V. under the Debt Issuance Program established in May 2013 has a term of three and a half years and an interest rate of 2.5 per cent per annum. Interest will be payable annually in arrears. The issue price is 99.595 per cent. The bond is expected to be issued on 19 September 2013. It shall be listed on the regulated market of the Luxembourg Stock Exchange. J.P. Morgan, Credit Suisse, HSBC, Landesbank Baden-Württemberg, Morgan Stanley and SEB act as joint bookrunners for the transaction.
The proceeds generated by this issue will be used for the early redemption of the 6.50 per cent bond that Continental issued in October 2010. “This will simultaneously help to further improve the maturity profile of financial liabilities,” the company noted. The Eurobond (ISIN DE000A1A1P09) issued by Conti-Gummi Finance B.V. with a coupon of 6.50 per cent and a nominal volume of €625 million will be redeemed early on 18 November 2013, more than two years before its original maturity. The redemption price is 103.25 per cent.
In May 2013, Continental set up a debt issuance programme with a total volume of €5 billion. It says this enables it to respond even more flexibly to market developments and to place short, medium, and long-term bonds on the capital market quickly. Continental has already issued two Eurobonds under this program: a five-year bond with a nominal volume of €750 million and a coupon of 3 per cent in July and a seven-year bond with a nominal volume of €750 million and a coupon of 3.125 per cent at the beginning of September.