Smurfit Kappa sells €400m bonds days after €1.35bn bank deal

Dublin based box-making giant plans to use most of proceeds to repay borrowings

Smurfit Kappa recently signed an unsecured €1.35 billion revolving credit line with 21 of its relationship banks. Photograph: Bloomberg

Smurfit Kappa recently signed an unsecured €1.35 billion revolving credit line with 21 of its relationship banks. Photograph: Bloomberg

 

Cardboard box-making giant Smurfit Kappa sold €400 million of bonds on Wednesday to refinance some of its existing facilities, days after agreeing a €1.35 billion credit line with a group of its banks.

The Dublin-based company said that the senior bonds, due in 2026, have been priced to carry a market interest rate, or yield, of 2.756 per cent. The size of the deal was higher than a €300 million fundraising that Smurfit Kappa had originally targeted.

The FTSE 100-listed group, led by Tony Smurfit, said that it will use most of the proceeds to repay borrowings under its existing securitisation facilities, which are based on income from trade receivables.

Revolving credit line

The bond sale follows on from Smurfit Kappa signing an unsecured €1.35 billion revolving credit line with 21 of its relationship banks, which will refinance an existing facility that matures in March next year. The new arrangement spans an initial five-year term and may, subject to bank consent, be extended up to a maximum of seven years at Smurfit Kappa’s request.

“This transaction is a continuation of our proactive financing strategy to reduce the cost and extend the term of our debt facilities, while increasing the flexibility of our capital structure,” said chief financial officer Ken Bowles.