Pirelli underwrites new revolving and term loan multicurrency facility

On 9 January, Pirelli signed a new revolving and term loan multicurrency facility worth a total of €1.0 billion and with a maturity of five years. The facility replaces an existing €1.2 billion revolving line of credit that is due to expire in November 2015 and which, as a consequence, will be cancelled in advance. The new revolving credit line totals €800 million while the Term Loan amounts to €200 million, with an amortisation structure which reflects the Pirelli Group’s cash flow generation and deleveraging trends.

Pirelli says the new contract is part of its ongoing efforts to optimise its debt structure. The tyre maker aims to take advantage of the opportunities being offered at present by a favourable market context and banking conditions, by lengthening the debt’s average maturity and diversifying sources of financing.

The revolving credit line entails an initial interest rate of Euribor plus 75 basis points, while the Term Loan has an initial interest rate of Euribor plus 95 basis points. “The competitive financing conditions, as well as the interest shown by the banking system, which saw the offer three times oversubscribed, are proof of the validity of the credit and of the Pirelli Group’s industrial strategy, as was also evident in the success of the €600 million bond issue launched last November,” wrote Pirelli in its statement announcing the new arrangement.

The refinancing contract was underwritten by the following ten primary international institutions: Bank of Tokyo-Mitsubishi, Barclays Bank PLC, BBVA, BNP Paribas, Commerzbank AG, Deutsche Bank AG, Mizuho, Natixis, Société Générale and UniCredit Bank AG.


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