The funding will consist of a $1.75 billion term loan, a $550 million revolving credit line and $750 million of senior notes, the company said today in a regulatory filing.
Federal-Mogul had $2.8 billion outstanding under its existing credit pact at the end of March, including a $1.9 billion term loan B due next year and a $950 million term loan C that matures in 2015, according to the filing.
Citigroup Inc. will host a meeting with prospective lenders tomorrow morning in New York, according to a person with knowledge of the transaction who asked not to be identified because the deal is private.
The company, based in Southfield, Michigan, said it expects to complete the refinancing “shortly after” selling $500 million of shares under a rights offering that began on June 7.
Moody’s Investors Service said May 30 that any debt reduction from the rights offering would have “no impact” on the company’s B2 credit rating, which is five levels below investment-grade.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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