Graeme Hart's Reynolds Group has sold $US1 billion in eight-year senior notes priced at 8.5% or 509 basis points over comparable US Treasuries, according to Thompson Reuters data.The Auckland-based food and beverage packaging company announced last week t
Graeme Hart’s Reynolds Group has sold $US1 billion in eight-year senior notes priced at 8.5% or 509 basis points over comparable US Treasuries, according to Thompson Reuters data.
The Auckland-based food and beverage packaging company announced last week the proceeds would be used to help fund the acquisition of the Evergreen Packaging group of companies and the Whakatane Mill from Carter Holt Harvey.
Both those companies are ultimately owned by Mr Hart.
Under the deal, expected to close next month, Reynolds Group will pay $US1.75 billion for the assets.
In addition to the notes, Reynolds has secured a $US750 million bank loan.
The new debt will boost Reynolds’ total indebtedness to $NZ8.37 billion.
Reynolds reported a profit from continuing operations of €11 million in 2009, on revenues of €2.82 billion ($NZ5.35 billion).
Mr Hart, whose personal fortune was valued at $5.5 billion in last year’s NBR Rich List, hasn’t commented on the asset reshuffle nor on speculation he is considering selling off part of his packaging empire in a share market float.
Moody's has provisionally rated Reynolds’ notes at Caa1, seven steps below investment grade. S&P has assigned Reynolds a B+ corporate credit rating, one step higher.
Reynolds, formerly called Rank Group Holdings, includes Swiss-based packaging firm SIG Group and US food packaging firm Reynolds Consumer Products and Closure Systems.
