SKF begins tender offer for up to €500 million of 3.875%, 1.875% notes

By Marisa Wong

Morgantown, W.Va., Nov. 23 – SKF AB is inviting holders of its outstanding €500 million 3.875% notes due 2018 and its outstanding €500 million 1.875% notes due 2019 to tender their notes for purchase.

The company is offering to purchase for cash up to €500 million total of the two series of notes, according to a notice.

The offer will expire at 11 a.m. ET on Nov. 30 and is expected to settle on Dec. 3.

The purchase price for each series of notes will be calculated using a benchmark and a purchase spread. The benchmark is the 2018 interpolated mid-swap rate for the 3.875% notes and the 2019 interpolated mid-swap rate for the 1.875% notes. The purchase spreads are 10 basis points and 30 bps, respectively.

Pricing will be set on Dec. 1.

The company will also pay accrued interest.

Holders must tender a minimum amount of €100,000 of notes.

The company said it will determine how to allocate the final acceptance amount between each series of notes, reserving the right to accept more or less (or none) of the notes of one series as compared to the other series.

If the tender cap is exceeded, the company will accept notes for purchase on a pro rata basis.

The tender offer is subject to a financing condition. The company said it intends to issue new euro-denominated fixed-rate notes.

Citigroup Global Markets Ltd. (+44 20 7986 8969, attn.: liability management group, liabilitymanagement.europe@citi.com) and Nordea Bank Danmark A/S (+45 33 33 16 75, attn.: Nordea liability management, NordeaLiabilityManagement@nordea.com) are the dealer managers. Citibank, NA (+44 20 7508 3867, fax +44 20 3320 2405, exchange.gats@citi.com) is the tender agent.

SKF makes ball and roller bearings and sealing systems. The company is based in Gothenburg, Sweden.

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