IHO Verwaltungs (Schaeffler) shops €2.05 billion equivalent four-part secured PIK toggle notes

By Paul A. Harris

Portland, Ore., May 21 – IHO Verwaltungs GmbH, the holding company whose interests include manufacturer Schaeffler AG, is in the market with €2.05 billion equivalent of senior secured PIK toggle notes (expected ratings Ba1/BB+/BB+) in four tranches, according to market sources.

The Rule 144A and Regulation S deal includes two euro-denominated tranches: six-year notes with two years of call protection and eight-year notes with three years of call protection. Joint global coordinator Deutsche Bank is the left lead and will bill and deliver for the euro-denominated notes.

The deal also includes two dollar-denominated eight-year notes with three years of call protection and 10-year notes with five years of call protection. Joint global coordinator Citigroup Global Markets Inc. is the left lead and will bill and deliver for the dollar-denominated notes.

The dollar-denominated eight-year notes have early guidance in the 6% area, while the 10-year notes are guided in the 6 3/8% area, according to a New York-based trader.

The deal was scheduled to be shopped on investor conference calls in the United Kingdom, as well as in the United States, on Tuesday morning and is expected to price later in the week, sources say.

BofA Securities and HSBC are the joint bookrunners.

The Herzogenaurach, Germany-based company plans to use the proceeds, together with cash on hand, to fully redeem dollar- and euro-denominated notes due in 2021 and 2023, as well as to repay €150 million under the issuer term facility, and to close out cross-currency hedging arrangements related to certain of the redeemed notes.

The prospective issuer is a holding and finance company underpinned by two investment grade-rated main assets, with a 75.1% stake (representing 100% of the voting rights) in Schaeffler AG and a 36% stake in Continental AG, both global manufacturing companies based in Germany.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.