INTERNATIONAL PACKAGING group Smurfit Kappa is preparing to refinance a further €250 million with a fresh bond issue yesterday.

The Dublin-quoted manufacturer said yesterday it planned to raise €250 million through the bond issue that will close on Friday. The move follows two issues totalling €440 million earlier this month.

The group said it planned to use the proceeds of the bonds it priced yesterday to pay off €250 million of its existing debt.

The bonds are due for repayment in 2020 and will pay interest at 3.5 per cent above the wholesale Euribor rate, readjusted every three months, meaning they are “floating” notes.

The €440 million issued earlier paid fixed rates, set at 4.875 per cent and 5.125 per cent, rather than a floating interest rate.

The company said the bonds were being offered in a private placement only. There was no indication yesterday of how much the group is likely to save in financing costs through its latest bond issue.

Stockbrokers Davy recently estimated that the €440 million issue would save the group about €10 million a year in interest.