Reynolds plans $2.9 billion three-part note offer for Monday drive-by

By Paul A. Harris

Portland, Ore., June 13 – Reynolds Group Holdings Ltd. plans to price $2.9 billion of high-yield notes in three tranches on Monday following a mid-morning conference call with investors, according to an informed source.

The offer includes $2.1 billion of senior secured notes in tranches of five-year floating-rate notes which become callable after one year at 102 and seven-year fixed-rate notes which become callable after three years at par plus 50% of the coupon. Tranche sizes remain to be determined.

Credit Suisse Securities (USA) LLC is the sole bookrunner for both tranches of secured notes.

Also on offer are $800 million of eight-year senior unsecured notes which become callable after three years at par plus 50% of the coupon. Credit Suisse and HSBC are the joint bookrunners for the tranche of unsecured notes.

The notes in both secured tranches feature three-year 40% equity clawbacks.

All of the notes feature 101% poison puts.

The issuing entities will be Reynolds Group Issuer SA, Reynolds Group Issuer Inc. and Reynolds Group Issuer LLC, wholly owned subsidiaries of Reynolds Group Holdings. The notes will be sold under Rule 144A and Regulation S for life.

The Auckland, New Zealand-based food and beverage packaging manufacturer plans to use the proceeds to refinance its existing notes including its 7 1/8% senior secured notes, 7 7/8% senior secured notes, 8½% senior notes, 9% senior notes, 9 7/8% senior notes and 6% senior subordinated notes.

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