Schaeffler sets Wednesday launch for €1 billion term loan C-2

By Sara Rosenberg

New York, Jan. 30 - Schaeffler AG has scheduled a bank meeting for 10 a.m. ET in New York on Wednesday to launch its proposed €1 billion five-year term loan C-2 (B1) that will be marketed to U.S. and euro funds, according to a market source.

The term loan C-2 will be split between euros and dollars, but the amounts are still to be determined, the source said.

Price talk on the term loan C-2 is Libor plus 550 basis points with a 1.5% Libor floor and an original issue discount that is still to be determined, the source added.

J.P. Morgan Securities LLC is the left lead bank on the deal. Other participants in the company's credit facility include BNP Paribas Securities Corp., Commerzbank, Deutsche Bank Securities Inc., HSBC Securities Inc., LBBW, Royal Bank of Scotland and UniCredit.

On Friday, the company announced that it signed a new €8 billion credit facility that consists of a €1 billion revolver and €7 billion in term loans.

The term loan C-2 is part of the new term loan debt. Other tranches include a €3 billion three-year term loan B and a €1 billion five-year term loan C-1.

Proceeds are being used to refinance an existing €7.7 billion credit facility that was set to mature in June 2014 and for general corporate purposes.

In addition, the company is planning the sale of €1 billion of senior secured notes to repay existing debt, with the roadshow kicking off on Monday in Frankfurt and Tuesday in New York.

Schaeffler is a Herzogenaurach, Germany-based supplier of components and systems for the automotive industry and a variety of industrial sectors.

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