Reynolds Group kicks off $2 billion two-tranche offering of notes

By Paul A. Harris

Portland, Ore., July 19 - Reynolds Group started a roadshow on Tuesday for a $2 billion two-part offering of eight-year notes, according to an informed source.

The deal features $1.5 billion of senior secured notes and $500 million of senior unsecured notes.

The notes of both tranches become callable in four years a par plus 50% of the coupon and also feature three-year 35% equity clawbacks and 101% poison puts.

The secured notes come with the same guarantees and security as the Reynolds Group Issuer Entities' 6 7/8% senior secured notes due Feb. 15, 2021.

The unsecured notes are guaranteed by the same entities that guarantee the Reynolds Group Issuer Entities' 8¼% senior notes due Feb. 15, 2021.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are the joint bookrunners.

Proceeds, along with proceeds from a $2 billion term loan, will be used to help fund the purchase of Graham Packaging Co. Inc.

The issuing entities are Reynolds Group Issuer LLC, Reynolds Group Issuer Inc. and Reynolds Group Issuer (Lux) SA, special purpose vehicles of the Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.

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