Solo Cup to offer $325 million high-yield bonds

By Sara Rosenberg

New York, Jan. 27 - Solo Cup Co. is making plans to sell an anticipated $325 million of high-yield bonds that along with a new credit facility will be used to fund the acquisition of SF Holdings Group Inc., a market source said.

Other details of the bond offering were not immediately available Tuesday.

Solo Cup is scheduled to hold a bank meeting on either Monday or Tuesday for a proposed $800 million credit facility, according to a market source. Bank of America is the lead bank on the deal.

The facility consists of a $150 million revolver and a $650 million term loan, although sizes and structure are still subject to change, the source said.

Furthermore, the term loan is being talked in the Libor plus 275 basis points area but that spread also is pretty fluid at this point, the source added.

Proceeds, combined with proceeds from a high-yield bond offering that is anticipated at $325 million, will be used to help fund the previously announced acquisition of SF Holdings Group Inc. (Sweetheart Cup, Hoffmaster Tissue and The Fonda Brands).

Also as part of the transaction, Vestar Capital Partners is making a substantial minority equity investment in Solo.

Solo Cup is based in Highland Park, Ill., and SF Holdings is based in Owings Mills, Md. Both companies are manufacturers and distributors of disposable foodservice and beverage-related products.

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