Sonoco wraps 6.5% notes offer, marks early tenders on other series

By Susanna Moon

Chicago, Nov. 8 - Sonoco Products Co. said it completed the cash tender offer for its $250 million of 6.5% notes due 2013.

As of 5 p.m. ET on Nov. 5, investors had tendered $132.33 million, or 52.93%, of the 6.5% notes.

As previously noted, the company will pay $1,158.96 for each $1,000 principal amount of its 6.5% notes plus accrued interest up to but not including the settlement date, which was expected for Monday.

The offer for the 6.5% notes did not include an early tender premium.

In a second offer, Sonoco will buy up to $146,634,823 of its $150 million 5.625% notes due 2016 and $41,305,000 of its 9.2% debentures due 2021. This amount is the difference between $300 million and the amount of 6.5% notes the company purchased in the first offer.

For each $1,000 principal amount in the second offer, holders will receive $1,170.06 per 5.625% notes and $1,418.18 per 9.2% notes tendered by 5 p.m. ET on Nov. 5, which includes a $30.00 early tender premium.

As of early tender date, holders tendered $74.75 million, or 49.83%, of the 5.625% and $36,984,000, or 89.54%, of the outstanding 9.2% notes.

Holders who tender their notes after the early tender date but by the expiration time will receive the total payment minus $30.00.

The second offer will expire at 5 p.m. ET on Nov. 22. The offers began on Oct. 25.

The total payment was based on the bid-side price of the reference security plus a fixed spread minus accrued interest up to but excluding the settlement date.

Pricing for the 6.5% notes was 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 was 125 bps over the 1.25% Treasury due Sept. 30, 2015, and for the 9.2% notes, it was 175 bps over the 2.525% Treasury due Aug. 15, 2020.

The reference yields were set at 0.505% for the 6.5% notes, at 1.095% for the 5.625% notes and at 4.282% for the 9.2% notes, as of 2 p.m. ET on Nov. 5.

The tender offer yields were 1.130% for the 6.5% notes, 2.345% for the 5.625% notes and 2.532% for the 9.2% notes

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

The offers were 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 said it has completed an offering that has satisfied that condition. The company sold an upsized $350 million of 5.75% 30-year senior notes on Oct. 25 to yield Treasuries plus 190 basis points. The size was initially $300 million.

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 could have been withdrawn up to 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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.