By Marisa Wong and Cristal Cody
Los Angeles, Jan. 12 – Sonoco Products Co. priced $1.2 billion of green senior notes (Baa2/BBB) in three tranches on Tuesday, according to an FWP filed Wednesday with the Securities and Exchange Commission.
Sonoco priced $400 million of 1.8% notes due 2025 at 99.973 to yield 1.809%, or a spread of 62.5 basis points over Treasuries.
The company priced $300 million of 2.25% notes due 2027 at 99.957 to yield 2.259%, or a spread of 75 bps over Treasuries.
The company sold $500 million of 2.85% notes due 2032 at 99.818 to yield 2.871%, or a spread of 112.5 bps over Treasuries.
According to a market source, the 2025 notes were talked to yield in the 75 bps area over Treasuries; the notes due 2027 were talked to yield in the 90 bps area over Treasuries; and the notes due 2032 had price talk in the Treasuries plus 125 bps to 130 bps area.
There is a special mandatory redemption clause connected to Sonoco’s acquisition of Ball Metalpack. If the acquisition is not completed on or before June 20, 2023 or if the agreement is terminated prior to that date, the notes will be called at 101.
The notes will also feature a separate par call and make-whole call.
J.P. Morgan Securities LLC, Wells Fargo Securities, LLC and BofA Securities, Inc. are the joint bookrunners.
Proceeds will be used, together with borrowings under the company’s expected $300 million term loan facility and commercial paper borrowings, to fund the cash consideration payable for the Ball Metalpack acquisition, which qualifies as an eligible green project.
Sonoco Products is a Hartsville, S.C., maker of paperboard-based and other packaging products.
| Issuer: | Sonoco Products Co.
|
| Amount: | $1.2 billion
|
| Issue: | Senior notes (green notes)
|
| Joint bookrunners: | J.P. Morgan Securities LLC, Wells Fargo Securities, LLC and BofA Securities, Inc.
|
| Co-managers: | U.S. Bancorp Investments, Inc., TD Securities (USA) LLC, MUFG, Deutsche Bank Securities Inc., Regions Securities LLC and Truist Securities, Inc.
|
| Special mandatory call: | If Ball Metalpack acquisition is not completed on or before June 20, 2023 or if agreement is terminated prior to that date, notes will be called at 101; for 2025 notes, if special mandatory redemption is triggered on or after Feb. 1, 2023, redemption price will be par
|
| Pricing date: | Jan. 11
|
| Settlement date: | Jan. 21
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| 2025 notes
|
| Amount: | $400 million
|
| Maturity: | Feb. 1, 2025
|
| Coupon: | 1.8%
|
| Price: | 99.973
|
| Yield: | 1.809%
|
| Spread: | Treasuries plus 62.5 bps
|
| Make-whole call: | Prior to Feb. 1, 2023 at Treasuries plus 10 bps
|
| Par call: | On or after Feb. 1, 2023
|
| Price talk: | Treasuries plus 75 bps area
|
| Cusip: | 835495AM4
|
|
|
| 2027 notes
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| Amount: | $300 million
|
| Maturity: | Feb. 1, 2027
|
| Coupon: | 2.25%
|
| Price: | 99.957
|
| Yield: | 2.259%
|
| Spread: | Treasuries plus 75 bps
|
| Make-whole call: | Prior to Jan. 1, 2027 at Treasuries plus 15 bps
|
| Par call: | On or after Jan. 1, 2027
|
| Price talk: | Treasuries plus 90 bps area
|
| Cusip: | 835495AN2
|
|
|
| 2032 notes
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| Amount: | $500 million
|
| Maturity: | Feb. 1, 2032
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| Coupon: | 2.85%
|
| Price: | 99.818
|
| Yield: | 2.871%
|
| Spread: | Treasuries plus 112.5 bps
|
| Make-whole call: | Prior to Nov. 1, 2031 at Treasuries plus 20 bps
|
| Par call: | On or after Nov. 1, 2031
|
| Price talk: | Treasuries plus 125 bps to 130 bps area
|
| Cusip: | 835495AP7
|
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