Sappi issues bonds to repay debt

SAPPI, the world’s largest producer of glossy paper, is offering e450 million (R5.9 billion) of bonds that will be used to buy back existing debt. The senior secured notes maturing in 2022 would be issued by the producer’s Sappi Papier Holding unit, the company said yesterday. Net proceeds, along with drawings under credit facilities and cash on hand, would be used to redeem all of the unit’s outstanding e250m senior secured notes due 2018 and $300 million (R3.6bn) senior secured notes due 2019, the company said. The producer plans to save $30m in annual interest payments through the refinancing, chief executive Steve Binnie said recently. Sappi, whose debt outside South Africa is rated junk, or below investment grade, is reducing debt as it cuts costs and spends less on new facilities. Shares fell 0.02 percent to close at R47.70 yesterday. – Bloomberg