Hayes Lemmerz withdraws €120 million bond deal, cites market conditions in auto-related sector

By Paul A. Harris

St. Louis, March 17 - Hayes Lemmerz International Inc. has withdrawn its €120 million offering of senior unsecured notes through its wholly owned subsidiary, HLI Operating Co. Inc., Hayes Lemmerz said in a news release Thursday.

The company also said the previously announced agreement to amend the company's June 3, 2003 credit agreement will not take effect.

Hayes Lemmerz confirmed that it remained comfortable with its current earnings guidance and outlook for 2005, the release added.

"As a result of recent industry announcements, current conditions in the high-yield market are no longer attractive," James Yost, vice president of finance and chief financial officer of Hayes Lemmerz, said in a news release. "Given other available alternatives, we did not feel a transaction was appropriate at current interest rates.

"We will continue to pursue more favorable actions to enhance liquidity and implement our growth strategy, such as our previously announced plans for an international accounts receivable securitization program and sale of our Commercial Highway Hub and Drum business.

"We are currently in discussions with our lenders to complete certain previously announced amendments to the credit agreement, including our ability to retain a portion of the proceeds from the proposed divestiture, favorably modify the financial covenants and increase the revolving loan."

Citigroup and Merrill Lynch & Co. were joint bookrunners for the bond offering. Price talk was 10¾% to 11%.

Hayes Lemmerz is Northville, Mich., manufacturer of automobile wheels.

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