Continental Sets Size, Price Guidance On High-Yield Bond

8th Jul 2010 14:52

LONDON (Dow Jones)--German tire maker Continental AG's (CON.XE) planned 2015-dated high-yield bond will be at least EUR750 million in size and will have a yield of between 8.75% and 9%, one of the banks working on the deal said Thursday. Citigroup Inc. and the Royal Bank of Scotland Group PLC are leading the five-year deal. The senior secured bond is expected to be rated B1 by Moody's Investors Service Inc. and B by Standard & Poor's Corp. Continental and its dominant shareholder, closely held ball-bearings maker Schaeffler Group, plan to merge operations. But both companies are still squeezed by huge debt after Schaeffler's stake building in Continental, and Continental's acquisition of Siemens AG's (SI) automotive-electronics division, VDO. Continental's net debt stood at EUR8.23 billion at the end of the first quarter. In June, the company said it aimed to relocate a part of the company's debt from banks to the capital market and planned to issue bonds worth up to EUR4 billion in addition to a high-yield bond. By Ainsley Thomson, Dow Jones Newswires; 44 20 7842 9318; [email protected] (Christoph Rauwald contributed to this report.) (END) Dow Jones Newswires July 08, 2010 09:52 ET (13:52 GMT)