Titan to repay debt with note offer
On 1 March, Titan International announced its intention to offer through a private placement, subject to market and other conditions, US$275 million aggregate principal amount of its 7.875 per cent Senior Secured Notes due 2017. The tyre maker says it intends to use the net proceeds from the offering to repay a portion of the existing indebtedness of certain of its indirect subsidiaries under the European credit facilities assumed as part of its acquisition of Titan Europe Plc in the fourth quarter of 2012. Any remaining net proceeds will be used for general corporate purposes, which may include financing potential future acquisitions and the repayment of other existing obligations.
Delving into the offer in greater detail, Titan International states that the notes are being offered by the initial purchasers only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States in compliance with Regulation S. The notes will be issued under the indenture dated 1 October 2010, pursuant to which Titan issued $200 million aggregate principal amount of its 7.875 per cent Senior Secured Notes due 2017 (the ‘existing notes’). The notes will form a single series with the existing notes and will vote as one class under the indenture. However, until such time as the notes become freely transferable under the Securities Act of 1933, as amended, the notes will have a restricted CUSIP and will not trade together with the existing notes.
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