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Reynolds cuts debt by $1.5 billion, reprices term loans during 2016
By Devika Patel
Knoxville, Tenn., Feb. 15 – Reynolds Group Holdings Ltd. cut its gross debt by $1.5 billion and took action to reduce its leverage further, including repricing its term loans.
“The group undertook a number of initiatives during the year to reduce gross leverage and interest expense as well as improve its debt maturity profile,” chief financial officer Allen Philip Hugli said on the company’s fourth quarter and year-end earnings conference call on Wednesday.
“In January, the group repriced a term loan, lowering the Libor floor to 0%.
“We will continue to work to reduce the group’s leverage and increase cash flow,” he said.
“In the course of the year, gross debt was reduced by $1.5 billion,” chief executive officer Thomas James Degnan added on the call.
Loans
On Jan. 24, Reynolds Group Holdings firmed pricing on its $3,315,000,000 first-lien term loan due February 2023 at Libor plus 300 basis points, the high end of the Libor plus 275 bps to 300 bps talk.
Alongside the dollar loan, the company also arranged a €249 million first-lien term loan due February 2023 that was priced at Euribor plus 350 bps.
Both tranches have a 25 bps step-down at B2/B corporate ratings, no floor, a par issue price and 101 soft call protection for six months.
Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. were the leads on the deal (B2/B+).
Proceeds will be used to reprice an existing U.S. term loan down from Libor plus 325 bps with a 1% Libor floor and an existing euro term loan down from Euribor plus 375 bps with no floor.
The transaction closed on Feb. 7.
Reynolds Group is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.
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