KION plans €1.5 billion credit facility to refinance old debt

By Susanna Moon

Chicago, Feb. 5 – KION Group AG said it plans a new €1.5 billion corporate credit facility with “investment-grade terms” that will be used to refinance some old debt.

Proceeds will be used to refinance debt that was acquired before its initial public offering in June 2013, according to a company press release.

The company said it plans to obtain the new facility in two tranches: a €1.15 billion five-year revolving credit line with two one-year extension options and a €350 million second tranche due in three years.

The €1.15 billion credit line will be used to fund bank debt and to help finance the call for its €450 million of 6¾% bonds due 2020, as well as for working capital, potential smaller acquisitions and as a liquidity reserve.

The second tranche proceeds will be used to fund the bond repayment “until a potential refinancing in the capital markets,” the company said.

The deal was arranged by KION with a group of 13 relationship banks as bookrunners and mandated lead arrangers, which were not disclosed in the release.

The refinancing is part of the company’s move to a “financing structure with typical terms for established corporates” since its IPO, the company said.

KION is repaying the last bond issued before its IPO and is refinancing its pre-IPO credit facility with the new facility that includes improved investment-grade terms, the release noted.

“These financing transactions are further important milestones for the KION Group, because we are now set up also on the financing side as an established listed corporate,” Thomas Toepfer, KION’s chief financial officer, said in the company release.

“We have now left the last elements of our financing from the early days of the KION Group behind us. The new financing with investment-grade style features significantly improves the terms for the KION Group and its flexibility to pursue its profitable growth.”

KION is a Wiesbaden, Germany-based provider of industrial and warehouse equipment and other material handling equipment.

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