EUR 2.1 billion bonds issue with maturities of six, eight, and ten years in Euros and US Dollars

Repayment of EUR 2.4 billion existing bonds due in 2021 and 2023

EUR 1.0 billion facilities agreement with existing banks syndicate extended by two years to 2024

Total debt reduction of around EUR 500 million from cash balance – significant extension of maturities



IHO Verwaltungs GmbH, a subsidiary of IHO Holding, announced today the refinancing of indebtedness in a total principal amount of EUR 3.1 billion. IHO Holding is a strategic management holding company owned by the Schaeffler family. The objective of the refinancing is to extend the debt maturity profile by taking advantage of favorable capital markets conditions. Furthermore, cash on hand will be used to reduce financial indebtedness.



The refinancing takes place at the level of IHO Verwaltungs GmbH, which directly holds 75 percent of Schaeffler AG’s shares (with 100% of the voting rights) and 36 percent of Continental AG’s shares. The refinancing comprises the issue of senior secured bonds in the amount of EUR 2.1 billion, denominated in both Euro and US Dollar with maturities of six, eight, and ten years. The size of the tranches and the pricing will be determined in the next few days.



The proceeds from the bond issuance will be used to repay IHO Verwaltungs GmbH’s existing bonds due in September 2021 and September 2023 with a total equivalent value of EUR 2.4 billion and associated redemption costs. The bonds due in September 2026 will remain outstanding and are not part of the planned transaction.



The existing facilities agreement, with a syndicate of four international banks, in the amount of EUR 1.0 billion, was extended by two years, to 2024. As part of this extension, the term loan is to be reduced from EUR 750 million to EUR 600 million and, at the same time, the revolving line of credit increased from EUR 250 million to EUR 400 million.



Existing cash will be used to reduce IHO Holding’s gross financial liabilities by around EUR 500 million in total.





Important notice

The securities referred to herein will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. State security laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.



This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan, or the United States of America or in any jurisdiction in which such offer or solicitation is unlawful. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada, Japan or the United States of America or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or the United States of America. The offer and sale of the securities referred to herein has not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or the United States of America. There will be no public offer of the securities in any jurisdiction.



This announcement does not, under any circumstances, constitute a public offering or an invitation to the public in connection with any offer within the meaning of Directive 2003/71/EC, as implemented by the Member States of the European Economic Area (the “Prospectus Directive”). The offer and sale of the Notes will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus for offers of securities.



The manufacturer target market (MIFID II product governance) is eligible counterparties and professional clients only (all distribution channels).



No PRIIPs key information document (KID) has been prepared as the offering is not available to retail investors in the EEA.



In the United Kingdom, this announcement is being distributed to, and is directed at, only (a) persons who have professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); (b) high net worth companies, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; or (c) persons to whom an invitation or inducement to engage in an investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). The investments to which this announcement relates are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such investments will be available only to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents.