TMD Friction talks €160 million seven-year notes to yield 10¾% area

By Paul A. Harris

St. Louis, May 13 - Germany's TMD Friction Finance SA talked its €160 million offering of seven-year senior secured notes (B3/B) to yield in the 10¾% area, an informed source said on Thursday.

The company also brought changes to the bond's debt incurrence covenants. The fixed charge coverage ratio increased to 2.25 times from 2 times. The consolidated senior secured leverage ratio decreased to 3 times from 3.5 times.

The books close at 9 a.m. ET Friday, and the deal is expected to price thereafter.

Credit Suisse and Quirin Bank are the joint bookrunners for the Rule 144A and Regulation S for life deal.

The notes come with four years of call protection.

Proceeds will be used to refinance the existing shareholder loan and for general corporate purposes.

The prospective issuer is a financing unit of TMD Friction, a Cologne, Germany-based supplier of brake friction materials.

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