Conti to offer another Eurobond

Continental has released details of its upcoming Eurobond offer. It says it will issue a bond with a volume of at least €500 million and a term to maturity of five years, and intends to use the issue proceeds thereof for the partial refinancing of its bond issued in September 2010. The offer is open to investors residing outside the US, Canada, Australia and Japan. The issue volume and bond conditions are expected to be determined in the next few days.

“By issuing a new bond to partially refinance the bond issued in September 2010, we will be able to reduce our interest costs significantly and further improve the debt maturity profile at the same time,” explained Continental’s chief financial officer, Wolfgang Schäfer.

The bond will be issued under Continental’s recently established Debt Issuance Programme and is to be placed with both institutional and private investors. The joint-bookrunners on the transaction are BNP Paribas, Citi, Deutsche Bank, ING and UniCredit. The bond will be issued in denominations of €1,000 and is expected to be listed on the Regulated Market of the Luxembourg Stock Exchange. 

In addition, Continental is calling the 7.5 per cent Eurobond with a nominal amount of €1 billion that was issued in September 2010 by its subsidiary Conti-Gummi Finance B.V. (ISIN DE000A1A0U37) for early redemption. The bond will be terminated early and is due for repayment on 16 September 2013, – four years prior to the original maturity. The agreed redemption price is 103.75 per cent. 

Back in 2010, the company, through its Conti-Gummi Finance B.V. subsidiary, issued four Eurobonds with different maturities in a total nominal amount of €3 billion. The terms and conditions of all four bonds contained an early redemption option. The first bond with a coupon of 8.5 per cent and a nominal amount of €750 million, issued in July 2010 maturing at 15 July 2015, was called in May 2013. The early redemption payment of that bond will be made on 15 July 2013. 

A decision is yet to be made regarding the two remaining Eurobonds issued in October 2010, which also contain a call right. They can be redeemed on or after 5 October 2013 at the earliest.