Smurfit Kappa sells €750m worth of bonds
By Maurice Garvey
PACKAGING giant Smurfit Kappa is set to trim its borrowing costs after selling €750m worth of bonds via a private placement with investors.
It is the latest move by a company, whose headquarters are in Ballymount, to reduce its interest expenses by taking advantage of its strong financial position and turmoil on the global government and corporate bond market that has seen yields crimped.
Smurfit Kappa headquarters in Ballymount
There has been a big fall in high-grade corporate and government bond yields, while there's also been an increase in negative-yielding debt.
Investors believe that the global economy might be on the brink of a recession.
Smurfit Kappa will use the proceeds from the new bond issue to redeem €250m in notes that fall due in 2020, and €500m that mature in 2021.
The senior notes to be sold by Smurfit Kappa’s subsidiary, Smurfit Kappa Treasury, will mature in 2027. It had initially intended to sell just €500m of the unsecured notes, but there was significant investor demand for the issue.
Earlier this year, Smurfit Kappa undertook a €400m bond sale for paper that matures in 2026. That was used to refinance some of its existing facilities.
The new €400m issue carried a coupon, or interest rate, of 2.756 per cent.
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