Meritor Completes Offering of New Convertible Senior Notes and Repurchase of a Portion of Existing Convertible Senior Notes due

Meritor Completes Offering of New Convertible Senior Notes and Repurchase of a
            Portion of Existing Convertible Senior Notes due 2026

PR Newswire

TROY, Mich., Dec. 4, 2012

TROY, Mich., Dec. 4, 2012 /PRNewswire-FirstCall/ --Meritor, Inc. (NYSE: MTOR)
today announced the closing of its offering of $250 million aggregate
principal amount at maturity of its 7.875% convertible senior notes due 2026
(the "7.875% notes"), which includes $25 million aggregate principal amount at
maturity of 7.875% notes issued pursuant to the initial purchasers' exercise
in full of their option to purchase additional 7.875% notes. The offering was
made to qualified institutional buyers in a private placement. The 7.875%
notes have an initial principal amount of $900 per note and will accrete to
$1,000 per note on December 1, 2020. The 7.875% notes also bear interest at a
rate of 7.875% per year on the principal amount at maturity of the 7.875%
notes, rank equally in right of payment to all of Meritor's existing and
future senior unsecured indebtedness and mature on March 1, 2026.

The company used the net proceeds of approximately $218.1 million from the
offering of the 7.875% notes (after discounts and estimated offering expenses)
and additional cash to acquire a portion of its outstanding 4.625% convertible
senior notes due 2026 (the "4.625% notes") in transactions that settled
concurrently with the closing of the 7.875% note offering. Approximately $245
million of $300 million principal amount of the 4.625% notes were acquired for
an aggregate purchase price of approximately $235.7 million (including accrued
interest). On or after March 1, 2016, the company may redeem the
remaining4.625% notes at its option, in whole or in part, at a redemption
price in cash equal to 100% of the accreted principal amount of the 4.625%
notes to be redeemed, plus accrued and unpaid interest to, but excluding, the
redemption date. Further, holders may require the company to purchase all or
a portion of their 4.625% notes at a purchase price in cash equal to 100% of
the accreted principal amount of the 4.625% notes to be purchased, plus
accrued and unpaid interest, on specified dates beginning on March 1, 2016 or
upon certain fundamental changes.

The 7.875% notes are 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 7.875% 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 the 7.875% notes. This represents
an initial conversion price of approximately $12.00 per share. On or after
December 1, 2020, the company may redeem the 7.875% notes at its option, in
whole or in part, at a redemption price in cash equal to 100% of the principal
amount at maturity of the 7.875% notes to be redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date. Further, holders may require
the company to purchase all or a portion of their 7.875% notes at a purchase
price in cash equal to 100% of the principal amount at maturity of the 7.875%
notes to be purchased, plus accrued and unpaid interest, on December 1, 2020
or upon certain fundamental changes.

The 7.875% notes 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.

(Logo: http://photos.prnewswire.com/prnh/20110330/DE73783LOGO )

SOURCE Meritor, Inc.

Website: http://www.meritor.com
Contact: Robert Herta, +1-248-435-1185, robert.herta@meritor.com, or Christy
Daehnert, +1-248-435-9426, christy.daehnert@meritor.com
 
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