AMERICAN AXLE ANNOUNCES UPSIZED NOTES OFFERING

By Hao Liu • Sunday, September 21 06:02 • Permanent Link

American Axle & Manufacturing Holdings, Inc. (NYSE: AXL) has announced the pricing and upsizing of its recent offering of senior secured and senior unsecured notes. The offering of $850 million of 6.375% senior secured notes due 2032 was upsized from the previously announced $843 million, while the offering of $1.25 billion of 7.750% senior unsecured notes due 2033 was upsized from the previously announced $600 million.

The net proceeds from this offering, together with borrowings under the existing credit agreement and cash on hand, will be used for various purposes including the pending business combination with Dowlais Group plc, repayment of outstanding borrowings, funding a change of control offer for certain outstanding notes of Dowlais, and general corporate purposes.

It is also notable that the issuer will deposit into segregated escrow accounts for each of the secured and unsecured notes an amount of cash until certain escrow release conditions, including the consummation of the combination, have been satisfied or a special mandatory redemption has occurred.

The press release also mentioned that the escrow and special mandatory redemption provisions will only apply to $600 million aggregate principal amount of unsecured notes, and it does not constitute a notice of redemption with respect to the issuer’s outstanding unsecured 6.50% senior notes due 2027 or its outstanding unsecured 6.875% senior notes due 2028.

The notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements. The offering is available only to qualified institutional buyers as defined in Rule 144A under the Securities Act or non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.

This offering of the notes may be made only by means of an offering memorandum. The market has reacted to these announcements by moving the company's shares -1.9% to a price of $6.19. For the full picture, make sure to review AMERICAN AXLE & MANUFACTURING HOLDINGS INC's 8-K report.

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