Jefferson Smurfit to price €370 million cash-pay and €300 million PIK notes

By Paul A. Harris

St. Louis, Jan. 13 - Jefferson Smurfit Group plans to price two tranches of high-yield bonds on Friday, according to an informed source.

Price talk is 7½% to 7¾% for JSG Funding plc's €370 million equivalent of 10-year senior subordinated cash-pay notes (Caa1/B-), which are non-callable for five years, offered in dollar and euro denominations. Proceeds will be used to fund the tender for the company's existing 15½% subordinated notes due 2013.

Meanwhile, price talk is 11½% to 11¾% for JSG Holdings plc's €300 million of 10-year senior pay-in-kind notes (Caa2/B-), which will become callable after two years at 102, with the call premium declining annually thereafter to 101 and to par. Proceeds will be used to fund a return of capital to shareholders.

Deutsche Bank Securities and Citigroup are joint bookrunners for the Rule 144A/Regulation S offering.

The notes in both tranches will mature in 2015.

Jefferson Smurfit is a Dublin, Ireland-based integrated manufacturer of containerboard, corrugated containers and other paper-based products.

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