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German engineering firm and auto-parts maker Schaeffler Group said Friday it completed a new credit agreement worth EUR8 billion with eight banks, replacing a deal signed in Nov., 2009, in order to improve both the maturity profile of its liabilities and financing costs.
"With the loan agreement signed today and our planned issuance of bonds we will diversify our funding sources and put our financing on a more sustainable and broader basis," Schaeffler Chief Financial Officer Klaus Rosenfeld said in a statement.
Schaeffler is the dominant shareholder of Continental AG (CON.XE).
- Schaeffler said the new deal improves the maturity profile of the financial liabilities significantly.
- The improved capital structure gives Schaeffler additional headroom for the further development of the group.
- The new credit lines of EUR8 billion replace the existing credit lines of EUR7.7 billion, which would have been in place until June 2014.
- The new credit arrangement includes term loans worth EUR7 billion and a revolving credit facility worth EUR1 billion.
- Schaeffler plans to replace loans worth around EUR2 billion through the issuance of corporate bonds in the short or medium term.
- In addition to the planned bond issuance, Schaeffler aims to syndicate the loans to further banks and institutional investors.
- As part of the refinancing deal the existing consortium of four banks was extended to eight banks.
- The new banking consortium comprises BNP Paribas SA (BNP.FR), Commerzbank AG (CBK.XE), Deutsche Bank AG (DBK.XE), HSBC Holdings plc (HSBA.LN), JP Morgan, LBBW, Royal Bank of Scotland plc (RBS.LN) and UniCredit SpA (UCG.MI).
- In preparation of the refinancing, Schaeffler's credit rating has been assessed by Standard & Poor's Corp. and Moody's Corp. (MCO).
- Schaeffler said the ratings will be released shortly.
-Frankfurt Bureau, Dow Jones Newswires; 49-69-29725-500