Meritor Announces Pricing of Convertible Senior Unsecured Notes

       Meritor Announces Pricing of Convertible Senior Unsecured Notes

PR Newswire

TROY, Mich., Nov. 29, 2012

TROY, Mich., Nov. 29, 2012 /PRNewswire/ -- Meritor, Inc. (NYSE: MTOR) today
announced the pricing on November 28, 2012 of its offering of $225 million
aggregate principal amount at maturity of convertible senior unsecured notes
due 2026 (the "notes"). The offering is being made to qualified institutional
buyers in a private placement. The notes will rank equally in right of payment
to all of Meritor's existing and future senior unsecured indebtedness.

Meritor has granted to the initial purchasers of the notes a 30-day option to
purchase up to an additional $25 million aggregate principal amount at
maturity of the notes. The initial purchasers today exercised their option to
purchase additional notes in full, bringing the total size of the offering to
$250 million aggregate principal amount at maturity. 

The sale of the notes is expected to close on December 4, 2012, subject to
customary closing conditions.

The company will pay 7.875% cash interest on the principal amount at maturity
of the notes semiannually on June 1 and December 1 each year, to holders of
record at the close of business on the preceding May 15 and November 15,
respectively, and at maturity to holders that present the notes for payment.
Interest will accrue on the principal amount at maturity thereof from, and
including, the date the notes are issued or from, and including, the last date
in respect of which interest has been paid or provided for, as the case may
be, to, but excluding, the next interest payment date. The notes have an
initial principal amount of $900 per note and will accrete to $1,000 at
December 1, 2020. The notes will mature on March 1, 2026.

The notes will be convertible in certain circumstances into cash up to the
principal amount at maturity of the note surrendered for conversion. For the
remainder of Meritor's conversion obligation, if any, in excess of the
principal amount at maturity, the notes will be convertible into cash, shares
of Meritor common stock or a combination of cash and common stock, at
Meritor's election, subject to certain limitations. The initial conversion
rate, subject to adjustment, is equivalent to 83.3333 shares of common stock
per $1,000 principal amount at maturity of notes. This represents an initial
conversion price of approximately $12.00 per share.

The company currently expects to use the net proceeds from the offering of the
notes (estimated to be approximately $218 million, after giving effect to the
exercise in full of the initial purchasers' option to purchase additional
notes), after deducting estimated underwriting discounts and the company's
expenses related to the offering, primarily to purchase, redeem or repay a
portion of its outstanding debt, as well as for general corporate purposes.

The securities priced today have not been registered under the Securities Act
of 1933, as amended, or applicable state securities laws, and unless so
registered, may not be offered or sold in the United States except pursuant to
an exemption from the registration requirements of the Securities Act and
applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation
of an offer to buy these securities, nor shall there be any offer or sale of
these securities in any state in which such offer, solicitation or sale would
be unlawful.

About Meritor
Meritor, Inc. is a leading global supplier of drivetrain, mobility, braking
and aftermarket solutions for commercial vehicle and industrial markets. With
more than a 100-year legacy of providing innovative products that offer
superior performance, efficiency and reliability, the company serves
commercial truck, trailer, off-highway, defense, specialty and aftermarket
customers in more than 70 countries. Meritor is based in Troy, Mich., United
States, and is made up of approximately 10,000 diverse employees who apply
their knowledge and skills in manufacturing facilities, engineering centers,
joint ventures, distribution centers and global offices in 19 countries.
Meritor common stock is traded on the New York Stock Exchange under the ticker
symbol MTOR.

Forward-Looking Statements
This press release contains statements relating to our future results
(including certain projections and business trends) that are "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of
1995. Forward-looking statements are typically identified by words or phrases
such as "believe," "expect," "anticipate," "estimate," "should," "are likely
to be," "will" and similar expressions. Actual results may differ materially
from those projected as a result of certain risks and uncertainties, including
but not limited to reduced production for certain military programs and our
ability to secure new military programs as our primary military programs wind
down by design in future years; reliance on major original equipment
manufacturer ("OEM") customers and possible negative outcomes from contract
negotiations with our major customers, including failure to negotiate
acceptable terms in contract renewal negotiations; our ability to successfully
manage rapidly changing volumes in the commercial truck markets and work with
our customers to adjust their demands in view of rapid changes in production
levels; global economic and market cycles and conditions, including a slower
than anticipated recovery from the recent global economic crisis; availability
and sharply rising costs of raw materials, including steel, and our ability to
manage or recover such costs; our ability to manage possible adverse effects
on our European operations, or financing arrangements related thereto, in the
event one or more countries exit the European monetary union; risks inherent
in operating abroad (including foreign currency exchange rates, implications
of foreign regulations relating to pensions and potential disruption of
production and supply due to terrorist attacks or acts of aggression); rising
costs of pension and other postretirement benefits; the ability to achieve the
expected benefits of restructuring actions; the demand for commercial and
specialty vehicles for which we supply products; whether our liquidity will be
affected by declining vehicle productions in the future; OEM program delays;
demand for and market acceptance of new and existing products; successful
development of new products; labor relations of our company, our suppliers and
customers, including potential disruptions in supply of parts to our
facilities or demand for our products due to work stoppages; the financial
condition of our suppliers and customers, including potential bankruptcies;
possible adverse effects of any future suspension of normal trade credit terms
by our suppliers; potential difficulties competing with companies that have
avoided their existing contracts in bankruptcy and reorganization proceedings;
potential impairment of long-lived assets, including goodwill; potential
adjustment of the value of deferred tax assets; competitive product and
pricing pressures; the amount of our debt; our ability to continue to comply
with covenants in our financing agreements; our ability to access capital
markets; credit ratings of our debt; the outcome of existing and any future
legal proceedings, including any litigation with respect to environmental or
asbestos-related matters; the outcome of actual and potential product
liability, warranty and recall claims; and possible changes in accounting
rules; as well as other substantial costs, risks and uncertainties, including
but not limited to those detailed herein and in our filings with the SEC.
These forward-looking statements are made only as of the respective dates on
which they were made, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise, except as otherwise required by law.

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SOURCE Meritor, Inc.

Website: http://www.meritor.com
Contact: Christy Daehnert, +1-248-435-9426, christy.daehnert@meritor.com
 
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