Schaeffler sets tranche sizes in €1.25 billion equivalent three-part PIK toggle notes offering

By Paul A. Harris

Portland, Ore., Oct. 21 – Schaeffler Holding Finance BV set tranche sizes in its €1.25 billion equivalent three-part offering of senior secured PIK toggle notes (B1/expected B) on Tuesday, according to a market source.

The Germany-based manufacturer also set yield talk for its upsized €350 million tranche of seven-year notes at 6% to 6¼%. The tranche is upsized from €300 million. The seven-year notes become callable after three years at par plus 50% of the coupon.

In addition to the euro-denominated seven-year notes, Schaeffler plans to sell $475 million of five-year notes, which are callable after two years at par plus 50% of the coupon and are talked to yield 6¼% to 6½%.

Also a $675 million tranche of eight-year notes, which is callable after four years at par plus 50% of the coupon, comes with yield talk of 6¾% to 7%.

Books closed at 9 a.m. ET Tuesday, and the deal is set to price Tuesday.

Global coordinator and joint bookrunner Deutsche Bank will bill and deliver for the dollar-denominated notes.

Global coordinator and joint bookrunner HSBC will bill and deliver for the euro-denominated notes.

Citigroup is also a global coordinator and joint bookrunner.

Commerzbank, JPMorgan and UniCredit are also joint bookrunners.

The issuer, a Herzogenaurach, Germany-based manufacturer of bearings for autos and industrial OEMs, plans to use the proceeds to repay bank debt.

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