Sept. 15, 2017—Delphi Automotive PLC (NYSE: DLPH), a leading global technology company serving the automotive sector, announced the pricing of a private offering of notes by its Powertrain Systems spin-off subsidiary, Delphi Jersey Holdings plc ("DPS"), marking a major milestone in the execution of its planned spin-off of its Powertrain Systems business.
DPS issued $800 million of senior notes bearing an interest rate of 5.00% and maturing in 2025 (the "Notes"). The offering was upsized from the previously announced $750 million aggregate principal amount as a result of strong investor interest and is expected to close on September 28, 2017, subject to customary closing conditions. Pending completion of the separation, proceeds of the offering will be deposited into escrow for the benefit of the holders of the Notes.
Additionally, on September 7, 2017, DPS and Delphi Powertrain Corporation ("Delphi Powertrain"), a wholly-owned U.S. subsidiary of DPS, entered into a credit agreement by and among DPS, Delphi Powertrain and JPMorgan Chase Bank, N.A., as Administrative Agent (the "Credit Agreement"). The Credit Agreement consists of a senior secured five-year $750 million term loan facility and a senior secured five-year $500 million revolving credit facility (collectively, the "Credit Facilities"). The Credit Facilities are expected to become available to DPS after the satisfaction of certain conditions customary for financings of this type, including the completion of the separation of DPS from Delphi by means of a spin-off and the establishment of DPS as a separate publicly traded company.
"These financings mark another important milestone in our process toward completing the spin-off of our Powertrain Systems business," said Kevin Clark, president and chief executive officer. "The strong demand for participation in the Credit Facilities and the Notes offering demonstrates the strength of the business and confidence in its ability to successfully compete as a standalone company."
Upon completion of the spin-off, DPS intends to use the proceeds from the Notes, together with borrowings under the $750 million term loan, to fund operating cash, pay taxes, fees and expenses related to the spin-off, and distribute a dividend to Delphi.
The Notes have been offered for sale to qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States in compliance
