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Knorr-Bremse AG issues corporate bond

December 02, 2016

Knorr-Bremse AG, the leading manufacturer of braking systems for rail and commercial vehicles, is issuing a corporate bond with a volume of EUR 500 million. The bond has a fixed coupon rate of 0.50 percent p. a. and a five-year term.

  • Knorr-Bremse AG, the leading manufacturer of braking systems for rail and commercial vehicles, is issuing a corporate bond with a volume of EUR 500 million. | © Kubinska & Hofmann

  • CFO Dr. Lorenz Zwingmann: “By issuing this bond we are adding to the existing latitude provided by our own liquid assets to enable us to react fast and efficiently to external growth opportunities as they arise.” | © Knorr-Bremse

  • Volume: EUR 500 million
  • Fixed coupon rate 0.50 percent p. a. over 5-year term
  • Revenue will serve to finance growth
  • Listing on Luxembourg Stock Exchange’s EURO MTF market

The subscription period began on December 1, 2016. In just under four hours the bond was more than 4.4 times oversubscribed. The order book was filled by 168 investors, reaching a total volume of over EUR 2.2 billion.

The revenue from the bond will serve to finance the growth of the Knorr-Bremse Group, while at the same time optimizing the ratio of equity to outside capital in its financing structure. “By issuing this bond we are adding to the existing latitude provided by our own liquid assets to enable us to react fast and efficiently to external growth opportunities as they arise,” explains Dr. Lorenz Zwingmann, CFO of Knorr-Bremse AG. “At the same time we are also benefiting from the current favorable interest rate environment and strong investor demand for bonds issued by corporate borrowers with top-class credit ratings,” Zwingmann adds. “Fourteen years after our previous issue, we are returning to the capital market with a debt issuance program with a volume of EUR 1 billion. This issue is the first step in the deployment of that program.” The bond issue is underwritten by Deutsche Bank, Commerzbank and UniCredit as joint bookrunners.

Only this summer, Standard & Poor’s and Moody’s raised Knorr-Bremse’s creditworthiness rating from ‘A-/Outlook positive’ to ‘A/Outlook stable’ and from ‘A3/Outlook positive’ to ‘A2/Outlook stable’ respectively. With this upgrade, the rating agencies are honoring the continuity of the Group’s performance, the strengthening of its competitive position, not least through investments in research and development, and the substantial growth of the Group through acquisitions and joint ventures. Standard & Poor’s have also awarded the new issue an “A” rating. Issued in denominations of EUR 1,000 the bond is designed to attract both private and institutional investors.

About the bond:

Issuer: Knorr-Bremse AG

Issuer ratings: A2/Outlook stable (Moody’s), A/Outlook stable (Standard & Poor’s)

Volume: EUR 500 million

Term: 5 years

Settlement: 08.12.2016

Maturity: 08.12.2021

Coupon: 0.5% p. a.

Reoffer spread: 0.571% p. a.

Listing: EURO MTF Luxembourg

Denomination: EUR 1,000

Applicable law: German law

Bookrunners: Commerzbank, Deutsche Bank and UniCredit

 

Eva Doppler

Tel: +49 89 3547 1498
Fax: +49 89 4444 54193
e-Mail: eva.doppler@knorr-bremse.com

Knorr-Bremse AG
Moosacher Straße 80
80809 Munich
Germany

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Knorr-Bremse AG, the leading manufacturer of braking systems for rail and commercial vehicles, is issuing a corporate bond with a volume of EUR 500 million. | © Kubinska & Hofmann 


CFO Dr. Lorenz Zwingmann: “By issuing this bond we are adding to the existing latitude provided by our own liquid assets to enable us to react fast and efficiently to external growth opportunities as they arise.” | © Knorr-Bremse