[TENNECO AUTOMOTIVE LOGO]
NEWS RELEASE
For Immediate Release
Contacts: Jane Ostrander
Media Relations
847 482-5607
jane.ostrander@tenneco-automotive.com
Leslie Hunziker
Investor Relations
847 482-5042
leslie.hunziker@tenneco-automotive.com
TENNECO AUTOMOTIVE CLOSES ON $800 MILLION SENIOR CREDIT FACILITY AND OFFERING
OF $125 MILLION OF SENIOR SECURED NOTES
TRANSACTIONS IMPROVE COMPANY'S FINANCIAL FLEXIBILITY
Lake Forest, Illinois, December 12, 2003 -- Tenneco Automotive (NYSE: TEN)
announced that the company on Friday, December 12 closed on its $800 million
senior credit facility and a private offering of $125 million of 10.25 percent
Senior Secured Notes, due July 15, 2013.
These two transactions completed the refinancing of Tenneco Automotive's senior
credit facility, which the company started in June with the issuance of a $350
million senior secured note.
With the closing of this most recent transaction, the company accomplished the
following:
* Replaced its current revolver facility with a new source of long-term
liquidity;
* Extended most of its debt maturities to 2009 and beyond with a minimal
pro forma increase to its interest expense; and
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* Favorably reset its financial covenant ratios through 2010.
The $800 million senior credit facility, which is an amendment and restatement
of the company's prior senior credit facility, includes a 5-year revolving line
of credit of $220 million, a 7-year term loan of $400 million and a 7-year
letter of credit facility of $180 million, which can also be used as a revolving
line of credit to fund short-term borrowings. Loans under the senior facility
will be priced initially at LIBOR plus 3.25%.
"We are very pleased to successfully complete this transaction, which will
improve Tenneco Automotive's financial flexibility by providing a committed
long-term source of liquidity, favorably adjusting our financial covenant ratios
through 2010, and extending nearly all of our debt maturities to 2009 and
beyond," said Mark P. Frissora, chairman and CEO, Tenneco Automotive.
The notes were sold to investors at a premium of 13 percent above the face
value, resulting in net proceeds to the company from the transaction of $136
million after deducting fees and other transaction related expenses. The notes
were issued under the same indenture and have the same terms as the $350 million
of 10.25% senior secured notes due in 2013 that the company issued in June of
this year.
The company used the net proceeds of initial borrowings under the $800 million
senior credit facility and the sale of the notes to repay all amounts previously
outstanding under the company's senior credit facility. Prior to these
transactions, the company's senior credit facility was for $964 million,
consisting of $514 million of term loans maturing in 2005, 2007 and 2008 and a
$450 million revolving line of credit, which was scheduled to terminate in 2005.
The prior term loans had a weighted average interest rate of LIBOR plus 4.05%.
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On a pro forma basis, this most transaction would have increased the company's
2002 full year interest expense by only $1 million. However the company is
considering reducing its interest expense by using interest rate swaps to
convert a portion of its fixed rate debt to lower-cost floating rate debt.
Tenneco Automotive offered the notes in reliance upon an exemption from
registration under the Securities Act of 1933 for an offer and sale of
securities that does not involve a public offering. The notes have not been
registered under the Securities Act and may not be offered or sold in the United
States absent registration or an applicable exemption from registration. This
news release does not constitute an offer to sell or the solicitation of an
offer to buy any security and shall not constitute an offer, solicitation or
sale in any jurisdiction in which it would be unlawful.
Tenneco Automotive is a $3.5 billion manufacturing company with headquarters in
Lake Forest, Illinois and approximately 19,600 employees worldwide. Tenneco
Automotive is one of the world's largest producers and marketers of ride control
and exhaust systems and products, which are sold under the Monroe(R) and
Walker(R) global brand names. Among its products are Sensa-Trac(R) and Monroe
Reflex(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(R)
mufflers and DynoMax(R) performance exhaust products, and Monroe(R) Clevite(R)
vibration control components.
This news release contains forward-looking statements. The forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from future results expressed or implied by such
forward-looking statements.
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