Johannesburg - Pulp and paper group Sappi [JSE:SAP] has
priced its upsized bond offering to raise $700m of new senior secured notes.
The new notes will consist of $400m notes due 2017 with a coupon of 7.750% per
annum and $300m notes due 2019 with a coupon of 8.375% per annum.
The net proceeds of the offering, together with cash on
hand, will be used to refinance $700m equivalent in aggregate principal amount
of senior secured notes due 2014, issued by Sappi’s subsidiary PE Paper Escrow
GmbH.
"The pricing of this upsized bond offering represents a
further step in the execution of Sappi's strategy, dealing with its high cost
2014 bonds and improving its debt maturity profile. The impact of the
transaction will be to reduce Sappi's ongoing cash finance charges by
approximately $27m per annum," Sappi CEO Ralph Boettger said.