ZF’s Debt Could Reach €8.5 Billion after TRW Purchase

The acquisition of U.S.-based TRW Automotive Holdings Inc. will push ZF Friedrichshafen AG's net debt from zero to €8.5 billion ($11 billion), Reuters says.

The TRW purchase is expected to be backed by €12.5 billion in financing from Citigroup and Deutsche Bank. The two banks will syndicate the loan to about 20 lenders, who are being asked to commit €750 million each, according to Reuters' sources.

Privately held ZF then hopes to eventually convert the loans to investment-grade bonds. Doing so will require the German company to gain an appropriate credit rating, which Reuters indicates isn't likely to happen until 2015 or later.