July 07, 2005
Bayer repurchases part of Eurobond issue and launches new hybrid bonds
Due to legal restrictions the bond tender offer is expressly not addressed to
investors in the United States or Italy; further restrictions are detailed in
the Tender Offer Memorandum. The invitation to purchase the new bond issue to
be launched is not addressed to investors in the United States; further
restrictions are detailed in the Offering Memorandum.
Leverkusen - Bayer AG plans to repurchase part of its EUR 3 billion Eurobond
issue due on April 10, 2007 and bearing an interest rate of 5.375 percent. The
intention is to acquire bonds in the nominal amount of up to EUR 1 billion in
order to optimize the Group's debt maturity profile. At the same time a
subordinated hybrid bond issue of benchmark volume will be launched to finance
Bayer is offering to effect the repurchase on preferential terms during an
early tender period beginning today, July 7, 2005, and ending at 4:00 p.m. CEST
on July 18, 2005, which may be followed by a late tender period. Bayer reserves
the right to modify, terminate or withdraw the tender offer.
The subordinated hybrid bonds will have a maturity of 100 years. They will bear
a fixed interest rate for the first ten years, after which Bayer has the option
each quarter to redeem the bonds at par. If Bayer does not exercise this
option, the bonds will thereafter bear a variable rate of interest with an
additional 1 percent spread.
Since the rating agencies classify this issue for the most part as equity, the
refinancing strengthens Bayer's rating. The early refinancing also enables the
company to take advantage of the currently favorable interest-rate levels and
the high acceptance of Bayer bonds in the capital market.
A bank consortium led by Deutsche Bank and JP Morgan is assisting Bayer with
the repurchase and with the launch of the new bonds. Both transactions are
planned to be completed in July.
Additional information is available on our press server at www.press.bayer.com