| Mon 27 Jul 2009, 9:00 | | SAP - Sappi Announces Successful Bond Issue |
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SAP
SAVVI
SAP - Sappi Announces Successful Bond Issue
Sappi Limited
(Incorporated in the Republic of South Africa)
Registration number: 1936/008963/06
JSE share code: SAP
ISIN code: ZAE000006284
("Sappi" or "the company")
Sappi Announces Successful Bond Issue
NOT FOR DISTRIBUTION TO U S NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED
STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION
OF U S SECURITIES LAW.
27 July 2009
Bond Issue
Further to Sappi`s announcement on Monday, 20 July 2009 in connection with debt
refinancing and a bond issue, Sappi announced today that it had successfully
priced its upsized bond offering to raise approximately US$800 million
equivalent of new senior secured notes due 2014. The new notes were in two
tranches: a Euro tranche of Euro350 million (US$497 million) and a US$ tranche
of US$300 million. The tranches priced at issue prices of approximately 95%
with coupons of 11.75% and 12% and yields of 13.125% and 13.375%, respectively.
The settlement date for the transaction is Wednesday, 29 July 2009 and is
subject to customary closing conditions. The notes will be issued by PE Paper
Escrow GmbH (the "issuer"), a special purpose Austrian limited liability
company. The proceeds of the offering will be immediately placed into escrow by
the issuer. The conditions to release the proceeds from escrow include the
refinancing of Sappi`s existing revolving credit facility and the establishment
of a new revolving credit facility, the replacement of Sappi`s existing OeKB
term loan facility with a new OeKB term loan facility, the amendment of certain
other debt facilities of Sappi, and other customary conditions. Upon
satisfaction of the escrow conditions, the issuer will become an indirect wholly
owned subsidiary of Sappi Limited and the notes will be guaranteed by Sappi
Limited and certain of its subsidiaries and secured with, together with the new
revolving credit facility, the new OeKB term loan facility and certain other
indebtedness of Sappi, first-priority security interests over certain assets of
Sappi Limited and its subsidiaries.
The bonds have been rated Ba2 (stable) (P) by Moody`s and BB (stable) by
Standard and Poors.
Sappi will use the proceeds to extend the maturity of debt by repaying shorter
term debt. Sappi has an arrangement and currently intends to repurchase all or
part of the Euro220 million vendor loan notes issued to M-real in connection
with the acquisition of its coated graphic paper business (VLNs), at a discount
of between 8.5% and 13.5%.
Ralph Boettger, CEO of Sappi Limited, commented that the refinancing of the
revolving credit facility and the OeKB loan was progressing well. He added :
"We are pleased with the outcome of the bond. The refinancings will take care
of our significant debt maturities for the next three years. The repayment of
all or part of the VLNs would also extend our debt maturities and remove costly
debt at a discount."
Certain information regarding Sappi made available in connection with the bond
offering has been submitted to the US Securities and Exchange Commission on Form
6-K, and is available on www.sec.gov.
The notes are being offered to qualified institutional buyers in accordance with
Rule 144A under the US Securities Act of 1933 (the "Securities Act" and outside
the United States in accordance with Regulation S under the Securities Act. Any
offers of the notes will be made only by means of a private offering
memorandum. The notes have not been registered under the Securities Act or the
securities laws of any other jurisdiction and may not be offered or sold in the
United States absent registration or an applicable exemption from registration
requirements. This notice does not constitute an offer to sell or the
solicitation of an offer to buy securities.
This press release shall not constitute an offer to sell or a solicitation of an
offer to purchase any securities in the Unites States, and shall not constitute
an offer, solicitation or sale in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful. The securities may not be
offered or sold in the United States absent registration under the Securities
Act or an applicable exemption from registration requirements. Any public
offering of securities to be made in the United States will be made by means of
a prospectus that may be obtained from the issuer and that will contain detailed
information about the company and management, as well as financial statements.
This press release is being issued pursuant to and in accordance with Rule 135e
under the Securities Act.
Forward-looking statements
Certain statements in this release that are neither reported financial results
nor other historical information, are forward-looking statements, including but
not limited to statements that are predictions of or indicate future earnings,
savings, synergies, events, trends, plans or objectives. Undue reliance should
not be placed on such statements because, by their nature, they are subject to
known and unknown risks and uncertainties and can be affected by other factors,
that could cause actual results and company plans and objectives to differ
materially from those expressed or implied in the forward-looking statements (or
from past results). Such risks, uncertainties and factors include, but are not
limited to, the impact of the global economic downturn, the highly cyclical
nature of the pulp and paper industry (and the factors that contribute to such
cyclicality, such as levels of demand, production capacity, production, input
costs including raw material, energy and employee costs, and pricing), adverse
changes in the markets for the group`s products, consequences of substantial
leverage, including as a result of adverse changes in credit markets that affect
our ability to raise capital when needed, changing regulatory requirements,
unanticipated production disruptions, adverse changes in the political situation
and economy in the countries in which we operate or the effect of governmental
efforts to address present or future economic or social problems, the impact of
investments, acquisitions and dispositions (including related financing), any
delays, unexpected costs or other problems experienced with integrating
acquisitions and achieving expected savings and synergies and currency
fluctuations. The company undertakes no obligation to publicly update or revise
any of these forward-looking statements, whether to reflect new information or
future events or circumstances or otherwise.
For further information contact:
Jorg Passler
Group Treasurer
Sappi Limited
Tel +32 2 676 9621
Mobile +32 495 588 621
e-Mail jorg.passler@sappi.com
Mark Thompson
Chief Financial Officer
Sappi Limited
Tel +27 11 407 8311
Mobile +27 82 876 2446
e-Mail Mark.Thompson@sappi.com
Andre F Oberholzer
Group Head Corporate Affairs
Sappi Limited
Tel +27 11 407 8044
Mobile +27 83 235 2973
e-Mail Andre.Oberholzer@sappi.com
Date: 27/07/2009 09:00:00 Produced by the JSE SENS Department.
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