April 24, 2014

Land Rover and Jaguar To Sell Global Bond

Jaguar Land Rover is planning to sell a  global bond as soon as two months from now, and has already named four banks to manage the transaction.  The British car brands are owned by Tata Motors, which stepped in when the economy went into a slump.  Tata has helped to revamp the brand and Jaguar officials confirmed at the 2100 New York Auto Show that the ownership had approved the financial moves necessary for Jaguar and Land Rover to remain not only relevant in the marketplace, but to set new standards in automobile luxury.  Both Jaguar and Land Rover have seen a recent resurgence in their sales.

The banks hired to handle the transactions are Citigroup Inc., J.P. Morgan Chase & Co., Credit Suisse Group and Standard Chartered PLC.  The specifics of the bond deal, such as the exact size and currency of issuance, haven’t been decided yet, but one can anticipate that the deal will be enough to fund substantial moves by both brands.

In what is likely a strategic move, the capital raised will likely to be used to repay some of the debt taken by parent company  Tata Motors.  Tata  purchased Jaguar and Land Rover from Ford for $2.3 billion 4 years ago.   By structuring the deal this way Tata can improve their balance sheet.

Jaguar and Land Rover both announced new and exciting models in new York last week.  The Land Rover Evoque was a real head turner and promises to be a great luxury solution to a smaller SUV category.