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SAP - Sappi Announces Successful Bond Issue

Release Date: 27/07/2009 09:00
Code(s): SAP
Wrap Text

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 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 Mark Thompson Chief Financial Officer Sappi Limited Tel +27 11 407 8311 Mobile +27 82 876 2446 e-Mail Andre F Oberholzer Group Head Corporate Affairs Sappi Limited Tel +27 11 407 8044 Mobile +27 83 235 2973 e-Mail Date: 27/07/2009 09:00:00 Supplied by Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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