Jefferson Smurfit, the paper and packaging firm, has launched the largest ever high-yield bond from a European company. The e905 million equivalent bond, which was split into 10-year tranches denominated in euros and dollars, will partly refinance Smurfit’s e3.7 billion takeover by Madison Dearborn Partners, the US private equity firm. Jefferson Smurfit is rated B2/B.
Madison Dearborn’s advisers, Deutsche Bank and Merrill Lynch, acted as joint bookrunners on the bond, and despite difficult market conditions, the launch went well.
The E350 million tranche was priced to yield 10.125 per cent, while the $545 million dollar tranche yielded slightly less at 9.625 per cent. The company had originally intended to include a sterling denominated tranche, but decided to shelve it in favour of a larger, more liquid euro tranche.
According to a report in Financial News more than half of the sterling bonds were sold to UK buyers, while continental investors accounted for 30 per cent and US investors 15 per cent. US investors bought more than 90 per cent of the dollar-denominated tranche.
Madison Dearborn Partners led the public-to-private transaction of Jefferson Smurfit in August, and the deal will also be partly financed through E2.525bn of senior secured facilities that are backing the transaction. ABN Amro, Allied Irish Banks, Cr?dit Lyonnais, Bank of America, Bank of Ireland have joined at the senior sub-underwriting stage.
Jefferson Smurfit is one of the largest European-based manufacturers of containerboard, corrugated containers and other paper-based packaging products and employs some 68,000 people. |
