By Paul A. Harris
St. Louis, July 24 - PE Paper Escrow GmbH priced an upsized $798 million equivalent two-part issue of five-year senior secured notes (Ba2/BB) on Friday, according to an informed source.
The Austria-based special-purpose vehicle, a subsidiary of Johannesburg, South Africa, coated papers company Sappi Ltd., priced €350 million of 11¾% notes at 95.066 to yield 13 1/8%. The yield came at the tight end of the 13¼% area yield talk and in line with discount talk of approximately 5 points.
The size of the euro tranche was increased from an expected range of €250 million to €300 million.
Sappi also priced $300 million of 12% notes at 95.095 to yield 13 3/8%. The yield on the dollar-denominated notes also priced at the tight end of the 13½% area yield talk. The issue price was slightly rich to the discount talk of approximately 5 points.
The dollar tranche was sized at the high end of the expected range of $250 million to $300 million.
JP Morgan, Calyon Securities, Citigroup, HSBC and RBS Securities, Inc. were joint bookrunners for the issue, the overall size of which was increased from $500 million equivalent. The co-managers were KBC Financial Products and Natixis Bleichroeder Inc.
Sappi will also put in place a new €650 million credit facility.
Proceeds will be used to pay off near-term debt maturities.
| Issuer: | PE Paper Escrow GmbH (Sappi Ltd.)
|
| Face amount: | $798 million equivalent, increased from $500 million equivalent
|
| Proceeds: | $759 million equivalent
|
| Maturity: | Aug. 1, 2014
|
| Security description: | Senior secured notes
|
| Bookrunners: | JP Morgan, Calyon Securities, Citigroup, HSBC, RBS Securities, Inc.
|
| Co-Managers: | KBC Financial Products, Natixis Bleichroeder Inc.
|
| Trade date: | July 24
|
| Settlement date: | July 29
|
| Change of control: | 101 put
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB
|
| Distribution: | Rule 144A/Regulation S
|
|
|
| Euro tranche
|
| Face amount: | €350 million (increased from €250 million to €300 million range)
|
| Proceeds: | €332.731 million
|
| Coupon: | 11¾%
|
| Price: | 95.066
|
| Yield: | 13 1/8%
|
| Call features: | Make-whole call at Bunds plus 50 bps until Aug. 1, 2012, then callable at 105.875, par on and after Aug. 1, 2013
|
| Equity clawback: | 35% at 111.75 until Aug. 1, 2012
|
| Price talk: | 13¼% area with approximately 5 points of OID
|
|
|
| Dollar tranche
|
| Face amount: | $300 million
|
| Proceeds: | $285.285 million
|
| Coupon: | 12%
|
| Price: | 95.095
|
| Yield: | 13 3/8%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Aug. 1, 2012, then callable at 106.0, par on and after Aug. 1, 2013
|
| Equity clawback: | 35% at 111.75 until Aug. 1, 2012
|
| Price talk: | 13½% area with approximately 5 points of OID
|
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