...FRANKFURT (S&P Global Ratings) Sept. 7, 2016--S&P Global Ratings today assigned its 'B+' issue rating to the proposed senior secured payment-in-kind (PIK) toggle notes to be issued by Schaeffler Verwaltung Zwei GmbH, a company holding 75% of Schaeffler AG (##/Stable/--) and 36% in Continental AG (###+/Stable/A-2). Schaeffler proposes a total issuance of about 2.5 billion, including a mix of U.S. dollar- and euro-denominated instruments with various maturities ranging from five to 10 years. The recovery rating on these debt instruments is '6', indicating that we expect recovery prospects in the event of default to be negligible, in the 0%-10% range. Our recovery expectations are constrained by the structural and contractual subordination of the proposed bonds to Schaeffler AG's debt instruments. The proposed PIK toggle notes will be secured by pledges over shares in Schaeffler AG and in Continental AG, but will not benefit from any subsidiary guarantees. We expect Schaeffler Verwaltung Zwei...
