Smurfit Kappa Completes EUR 1.375 Billion Refinancing
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Smurfit Kappa Group, Ireland, has completed refinancing of its existing senior secured credit facility with a new five-year unsecured relationship bank facility. In connection with the refinancing, the collateral securing the obligations under the Group's various outstanding senior notes and debentures has also been released and the senior notes and debentures are therefore now unsecured. The transition of the capital structure from secured to unsecured reflects the re-positioning of SKG's credit profile from leveraged to corporate.
The new EUR 1.375 billion, five-year facility includes a EUR 750 million term loan with a margin of 2.25% and a EUR 625 million revolving credit facility with a margin of 2.00%, reduced from margins of 3.75% and 3.25% respectively.
The Group expects cash interest savings from the refinancing will be approximately EUR 13 million per annum and the transaction will be immediately earnings accretive. There will be a one-off exceptional cost of approximately EUR 16 million arising from the accelerated amortization of unamortized deferred debt issue costs related to the existing facility.
The transaction was initially launched at EUR 1.100 billion and was upsized to EUR 1.375 billion following a substantial oversubscription. A total of 22 banks, all of whom are SKG relationship banks, have committed to the new facility.
In addition to the new senior facility, SKG has put in place a five-year trade receivables securitization program of up to EUR 175 million utilizing the Group's receivables in Austria, Belgium, Italy, and the Netherlands. The program, which has been arranged by Rabobank and carries a margin of 1.70%, will complement the Group's existing EUR 250 million securitization program.
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