Continental Signs 4.5 Billion Euro Syndicated Loan Deal image

Continental, the second-largest auto-parts supplier in Europe, has signed a new syndicated loan deal to refinance debt.

The Hanover, Germany-based manufacturer announced today, January 23rd, that it has signed a loan deal for 4.5 billion euro, slightly lower compared with the previous figure and divided into two parts. The debt replaces a loan expiring in April 2014 and includes around 30 German and international banks.

“The new loan agreement not only improves our financing and debt maturity profile but also puts our financing on a geographically broader footing,” Chief Financial Officer Wolfgang Schaefer said in the statement.

The company reached record sales of 32.7 billion euro last year, but for 2013 the company predicts slower revenue growth as the contraction in the European auto market will most likely weight on its profitability. On January 14th, Continental predicted that adjusted earnings before interests and taxes this year will amount to 10% of sales, down from a margin of 10.7% in 2012.

The new deal with banks consists of a three-year loan of 1.5 billion euro and other 3 billion euro available in a 5-year revolving credit line. The company said that documentation will be simplified and that it is now released from collateral implied by the previous borrowing terms.