• Heidelberg plans to place a high yield bond of at least EUR 300 million
　　• Any net proceeds of issuance from high yield bond will be used to repay liabilities to banks and for general corporate purposes
　　• On successful placement of the high yield bond, Heidelberg will be able to repay all loans secured by government guarantees ahead of schedule

　　Heidelberger Druckmaschinen AG announced at the end of last week that it has made comprehensive refinancing arrangements regarding its credit lines. In this connection, the management board of Heidelberg has adopted a resolution with the approval of the Supervisory Board to issue a high yield bond of at least EUR 300 million to improve its financing structure. On that basis, the existing credit lines, partly secured by government guarantees and maturing in July 2012, will be refinanced early with the net proceeds and through entering into a new revolving credit facility of EUR 500 million subject to improved terms and conditions and with a maturity until the end of 2014.

　　With the planned issue of a high yield bond with a medium-term maturity, Heidelberg seeks to take advantage of favourable capital market environment to repay existing loans and for general corporate funding purposes. The placement of the high yield bond will be assisted by a banking consortium lead by five joint ‘book runners’. The high yield bond offering is to be led by this consortium starting from March 28, 2011.

　　The high yield bond is scheduled for issue in the week of April 4, 2011. Afterwards the bond will be listed in the unregulated market of the Luxembourg Securities Exchange.

　　Following a successful placement of the high yield bond, the past credit financing partly collateralised by government guarantees is to be replaced by a new revolving credit facility for EUR 500 million with a banking consortium.

　　‘Following the successful capital increase last year, we will further optimise our funding structure by comprehensively refinancing our credit lines. In doing so, we have reached our objective of funding Heidelberg on a sustained basis without any government assistance - more than one year before the government guarantees were scheduled to expire,’ said Dirk Kaliebe, Heidelberg's CFO (pictured above). ‘Thanks to our leading role in the global print machinery market and our substantially improved cost and capital structure, we are convinced that our bond will represent an attractive investment for investors.’

　　At present, Heidelberg's volume of financing consists of a syndicated credit line amounting to some EUR 445 million as well as a line of credit collateralised with government guarantees, likewise in the amount of EUR 445 million. On placement of the bond issue and refinancing of the credit lines, the financing structure in the wake of the bond issue will comprise at least EUR 300 million, plus the new, revolving credit facility worth EUR 500 million.

　　In the summer of 2009, Heidelberg had arranged a finance package scheduled to run until mid-2012, consisting of a loan from the Kreditanstalt für Wiederaufbau (KfW) originally amounting to EUR 300 million, a loan underpinned by government guarantee commitments originally in the amount of EUR 550 million, as well as an existing, syndicated credit line of a banking syndicate likewise originally equivalent to EUR 550 million. Following a successful capital increase in September 2010, the company had already reduced its financial liabilities considerably and repaid the KfW loan. The refinancing arrangement follows in the wake of the successful capital increase.

　　‘We wish to thank the German government, as well as the states of Baden-Wuerttemberg and Brandenburg for their guarantees. Thanks to their support, Heidelberg was able to successfully bridge the difficult period of the financial markets and economic crisis. The long-term refinancing arrangements agreed today (25 March) will enable us to create a solid base for sustainable, profitable growth,’ said Bernhard Schreier, CEO of Heidelberg.