Schaeffler prices $1.3 billion and €750 million term loans at wide ends of spread talk

By Paul A. Harris

Portland, Ore., Oct. 16 – Schaeffler AG (INA Beteiligungsgesellschaft GmbH) priced $1.3 billion and €750 million term loan B tranches with 350 basis points spreads to Libor and Euribor, respectively, according to a market source.

The spread came at the wide end of the 325 bps to 350 bps spread talk.

The dollar-denominated tranche priced at 99, at the cheap end of the 99 to 99.5 price talk.

The euro-denominated tranche priced at 99.5.

All of the term loan B debt (Ba2) is due May 15, 2020 and still has a 0.75% floor and 101 soft call protection for six months.

Initially, the loan was launched as a €1.8 billion equivalent term loan B with the breakdown of the euro and dollar tranches to be determined.

Covenants include leverage and interest coverage ratios.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and HSBC Securities are the global coordinators on the deal, with Citigroup the left lead on the U.S. debt and Deutsche Bank the left lead on the euro debt. Other bookrunners include Commerzbank, J.P. Morgan Securities LLC and UniCredit.

Proceeds will be used to refinance existing term loans.

Schaeffler is a Herzogenaurach, Germany-based manufacturer of bearings for autos and industrial original equipment manufacturers.

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