Continental Strives For Further Improvement Of Financing Structure

(PresseBox) (Hannover, ) .
- Refinancing initiated for syndicated loan facilities maturing in April 2014
- Terms through 2016 and 2018 and greater flexibility targeted
- Signing of loan agreement in January 2013 expected

Hanover, December 21, 2012. Continental, the international automotive supplier, got off to an early start with the process of refinancing the syndicated loan due in April 2014. In so doing, the DAX 30 company is aiming to further improve its financing structure and maturity profile, while at the same time enhancing its flexibility. Within the scope of the planned refinancing, the loan volume is to be reduced slightly - to a total of €4.5 billion - and split up into two tranches with different maturities: a term loan in the amount of €1.5 billion, with a term of three years, and a five-year revolving credit facility in the amount of €3 billion. Among other things, the company also intends to ease the documentation complexity.

"We are confident that we shall be able to conclude the negotiations and sign the credit agreement in January 2013," announced Wolfgang Schäfer, Continental's CFO, in Hanover on Friday. "Our company has developed very well in the past few years. We intend to take advantage of our much better financial position to further improve the maturity profile of our financial indebtedness as well as agree on the release of asset collateral and the improvement of certain other terms."

Issuing five bonds and generating substantial free cash flow (FCF) have enabled the compa-ny to chop almost €9 billion off the €13.5 billion syndicated loan originally agreed in 2007. In the last three years, the company's net indebtedness has declined by more than €2.5 billion. It stood at €6.8 billion at the end of the 3rd quarter of 2012 while the gearing ratio (net in-debtedness divided by total equity) amounted to 78 percent.

For your information:
A revolving credit facility is the commitment of one or more banks to grant a certain amount up to a limit on agreed terms dependant on the needs of the borrower.

Unlike a term loan, a revolving credit facility gives the borrower – during the term agreed up-on – the possibility of claiming all or part of the amount the bank has committed itself to lend-ing. Repaid amounts can be utilised again. At the end of the third quarter of 2012, Continental had unused committed credit lines in the amount of just under €2.6 billion. The €2.5 billion revolving credit facility under the syndicated loan facility was utilized with €602 million only.


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