Schaeffler talks dollar notes to yield 4 7/8% area; €1.5 billion three-part deal to price Friday

By Paul A. Harris

Portland, Ore., March 26 – Schaeffler Finance BV talked a tranche of dollar-denominated eight-year senior secured notes to yield in the 4 7/8% area, according to a market source.

The tranche is expected to be sized at $500 million to $600 million.

The tranche is part of a €1.5 billion equivalent three-part offering of senior secured notes (Ba2/BB) expected to price on Friday.

In addition to the dollar-denominated notes, the Rule 144A and Regulation S deal also features euro-denominated five-year notes, which come with two years of call protection, and euro-denominated 10-year notes, which come with five years of call protection.

Final sizes remain to be determined; however, all three tranches are expected to come in benchmark sizes.

Joint bookrunner BofA Merrill Lynch will bill and deliver for the dollar-denominated notes. Joint bookrunner Deutsche Bank will bill and deliver for the euro-denominated notes.

Barclays, BayernLB, BNP, Citigroup, Commerzbank, HSBC, JPMorgan and UniCredit are also joint bookrunners.

The Herzogenaurach, Germany-based manufacturer of bearings for autos and industrial OEMs plans to use the proceeds to repay its dollar- and euro-denominated notes due 2017.

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