March 10 (Bloomberg) -- Continental AG offered lenders joining a credit line initial interest ranging from 250 basis points to 300 basis points more than benchmark lending rates, two people with knowledge of the deal said.
Europe’s second-largest tiremaker is seeking 6 billion euros ($8.3 billion) of term loans and revolving credits for as long as three years to replace maturing debt, said the people, who declined to be identified because the financing is private.
Antje Lewe, a spokeswoman for Continental, declined to comment on details of the refinancing.
Hanover, Germany-based Continental agreed to pay interest of between 475 basis points and 500 basis points more than benchmark lending rates for its existing loans, according to data compiled by Bloomberg. The debt stems from Continental’s 2007 acquisition of Siemens AG’s VDO unit for 11.4 billion euros. A basis point is 0.01 percentage point.
Loan issuers in the same ratings category as Continental paid an average margin of 335 basis points in the past six months on European loans, according to data compiled by Bloomberg. Continental’s debt is rated B by Standard & Poor’s and B1 by Moody’s Investors Service.
Citigroup Inc. and Deutsche Bank AG are coordinating the refinancing, the data show. A basis point is 0.01 percentage point.
To contact the editor responsible for this story: Faris Khan at firstname.lastname@example.org CON GY <Equity>