Schaeffler units successfully solicit consents for 10 series of notes

By Angela McDaniels

Tacoma, Wash., Oct. 15 – Schaeffler AG subsidiaries Schaeffler Holding Finance BV and Schaeffler Finance BV obtained the consents they need to amend 10 series of notes, according to company announcements.

Schaeffler Holding solicited consents from the holders of its €800 million of 6 7/8%/7 5/8% senior secured PIK toggle notes due 2018 and $1 million of 6 7/8%/7 5/8% senior secured PIK toggle notes due 2018.

The issuer sought to amend some provisions to increase flexibility in the group capital structure and to facilitate potential future refinancing, recapitalization and deleveraging actions.

Among other things, the amendments change the definition of permitted upstream payments and make changes to the sections governing restricted payments, interest reserve account and release of collateral.

The issuer also solicited consents to reflect any consequential changes from additional flexibility achieved on Schaeffler Finance’s notes issued in May 2014, in particular, relating to the definitions of asset sale and permitted investment.

The issuer offered a 0.5% consent fee.

Schaeffler Finance solicited consents from the holders of its €800 million of 7¾% senior secured notes due 2017, $600 million of 7¾% senior secured notes due 2017, €600 million of 4¼% senior secured notes due 2018, $850 million of 4¾% senior secured notes due 2021, €500 million of 2¾% senior secured notes due 2019, $700 million of 4¼% senior secured notes due 2021, €500 million of 3½% senior secured notes due 2022 and €500 million of 3¼% senior notes due 2019.

The consents allow the issuer to generally align the terms and conditions of the indentures with the terms and conditions of the notes it issued in May 2014.

Among other things, the changes amend the definitions of asset sale, permitted lien, permitted upstream payments, restricted payments and subordinated debt, and the consolidated secured debt leverage ratio will be changed to 3.75 times.

The issuer offered a 0.25% consent fee.

Consents were needed from the holders of at least a majority of the principal amount of outstanding notes in order to make the amendments.

Both consent solicitations began Oct. 6 and ended at 6 a.m. ET on Oct. 15.

The solicitation agents were Citigroup Global Markets Ltd. (44 20 7986 8969, 212 723-6106, 800 558-3745 or liability.management.europe@citi.com), Deutsche Bank AG, London Branch (44 20 7545 8011, 212 250-5655 or liability.management@db.com) and HSBC Bank plc (44 20 7992 6237, 888 HSBC-4LM, 212 525-5552 or liability.management@hsbcib.com). The tabulation agent and information agent was Lucid Issuer Services Ltd. (44 0 20 7704 0880 or schaeffler@lucid-is.com).

Schaeffler is a Herzogenaurach, Germany-based manufacturer of bearings for automobiles and industrial original equipment manufacturers.

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