New Issue: Graphic Packaging sells $850 million notes in eight- and 10-year tranches

By Paul A. Harris

St. Louis, August 1 - Graphic Packaging International Inc. sold $850 million in a two-tranche issue of high-yield bonds on Friday, according to a syndicate source.

The company sold $425 million of senior notes due Aug. 15, 2011 (B2/B-) at par to yield 8½%. Price talk was 7¾%-8%.

Graphic Packaging also sold $425 million of senior subordinated notes due Aug. 15, 2013 (B3/B-) at par to yield 9½%. Price talk was 100 basis points behind the senior notes.

Bookrunners were Goldman Sachs & Co., Deutsche Bank Securities Inc., JP Morgan, Morgan Stanley, Credit Suisse First Boston and Citigroup. ABN Amro and Banc of America Securities were co-managers.

Proceeds will be used to repay Riverwood and Graphic Packaging debt and take out preferred stock of Graphic Packaging as part of the merger of the two companies.

Issuer:	Graphic Packaging International Inc.
Amount:	$850 million
Bookrunners:	Goldman Sachs, Deutsche Bank Securities, JP Morgan, Morgan Stanley, Credit Suisse First Boston, Citigroup (joint)
Co-managers:	ABN Amro, Banc of America Securities
Settlement date:	Aug. 8, 2003
Eight-year senior note tranche
Amount:	$425 million
Maturity:	Aug. 15, 2011
Security description:	Senior notes
Coupon:	8½%
Price:	Par
Yield:	8½%
Spread:	407 basis points
Call features:	Make-whole call at Treasuries plus 50 basis points until Aug. 15, 2007, then at 104.25, 102.125, declining to par on Aug. 15, 2009 and thereafter
Equity clawback:	Until Aug. 15, 2006 for 35% at 108.50
Ratings:	Moody's: B2
	Standard & Poor's: B-
Price talk:	7 ¾%-8%
Rule 144A Cusip:	38869PAA3
10-year senior subordinated note tranche
Amount:	$425 million
Maturity:	Aug. 15, 2013
Security description:	Senior subordinated notes
Coupon:	9½%
Price:	Par
Yield:	9½%
Spread:	507 basis points
Call features:	Make-whole call at Treasuries plus 50 basis points until Aug. 15, 2008, then at 104.75, 103.167, 101.583, declining to par on Aug. 15, 2011 and thereafter
Equity clawback:	Until Aug. 15, 2006 for 35% at 109.50
Ratings:	Moody's: B3
	Standard & Poor's: B-
Price talk:	100 basis points behind the senior notes
Rule 144A Cusip:	38869PAC8

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