Sonoco plans to pay up to $300 million for three note series in tender

By Susanna Moon

Chicago, Oct. 25 - Sonoco Products Co. said it began cash tender offers to purchase a portion of its outstanding bonds for $300 million.

The company is offering to purchase for cash its $250 million 6.5% notes due 2013 and the maximum principal amount of its $150 million 5.625% notes due 2016 and $41,305,000 9.2% debentures due 2021 that it can purchase for $300 million less any amount it pays to repurchase its 6.5% notes.

For each $1,000 principal amount, the total payment will be based on the bid-side price of the reference security plus a fixed spread minus accrued interest up to but excluding the settlement date.

Holders who tender their 5.625% notes or 9.2% notes by Nov. 5 will receive the total payment, which includes a $30 early tender premium. The offer for the 6.5% notes does not include an early tender premium.

Pricing for the 6.5% notes will be based on a spread of 62.5 basis points over the 0.5% Treasury note due Oct. 15, 2013. For the 5.625% notes, it will be 125 bps over the 1.25% Treasury due Sept. 30, 2015, and for the 9.2% notes, it will be 175 bps over the 2.525% Treasury due Aug. 15, 2020.

The yields for the reference securities will be determined at 2 p.m. ET on Nov. 5.

Payments also will include accrued interest up to but excluding the settlement date.

The offer for the 6.5% notes will end at 5 p.m. ET on Nov. 5, and the maximum tender offer will expire at 5 p.m. ET on Nov. 22.

The offers are conditioned on the completion of one or more public offerings of at least $300 million principal amount of senior debt securities by the expiration of the first offer.

Sonoco expects to purchase the bonds using proceeds from its previously announced offering of senior notes securities as well as other available cash resources.

Tendered notes may be withdrawn at any time at or before 5 p.m. ET on Nov. 5.

Bank of America Merrill Lynch (888 292-0070 or collect 980 388-9217) and J.P. Morgan (866 834-4666 or collect 212 834-3424) are the dealer managers. Global Bondholder Services Corp. (212 430-3774 or 866 470-3900) is the depositary and information agent.

Sonoco Products is a Hartsville, S.C., manufacturer of paperboard-based and other industrial and consumer packaging products.

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