Moody’s assigns B1 to Schaeffler bonds

Moody's Investors Service said it assigned a B1 instrument rating to new secured bonds issued in dollar and euro tranches by Schaeffler Holding Finance BV and guaranteed by Schaeffler Verwaltungs GmbH.

The outlook is stable.

The B1 rating, one notch below the Ba3 corporate family rating of INA Beteiligungsgesellschaft mbH (Schaeffler), reflects the fact that these bonds are structurally subordinated to bonds issued by Schaeffler Finance BV and term loans issued by INA Beteiligungsgesellschaft mbH.

This subordinated position in the loss-given default waterfall is partially mitigated by the fact that the bonds are secured, among others, by pledges over bank accounts, certain receivables and all shares of the issuer and some subsidiaries of Schaeffer Verwaltungs GmbH, including 70% of the 11.8% stake that Schaeffler Verwaltung GmbH holds in Continental AG (Baa3 stable), the agency said.

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