Privately-owned New Zealand packaging giant Rank Group has tapped the cheap US debt market to reprice a $2.3 billion term loan, hot on the heels of Fortescue Metals Group.
Credit Suisse bankers hit the phones late last night to seal a cross-border term loan for Rank Group packaging and storage subsidiary Reynolds Group.
The refinancing is understood to have included a US$2.21 billion term loan and a €297 million tranche. Both will mature in December 2018.
The deal is further proof that corporate issuers, including in Australia, are taking advantage of very liquid market conditions in the US and European leveraged loan and high yield bond markets to refinance at significantly lower costs. Credit Suisse has dominated US term loan and high-yield issuance in Australia for more than a decade.
The dollar tranche was expected to price at 300 to 325 basis points over LIBORm with a one per cent floor, and will yield 4.06-4.32 per cent, based on the proposed guidance.
The deal will save Reynolds Group 50 to 75 basis points in interest, and lengthen the maturity of its terms loans by about two months.
Earlier this week, Fortescue Metals Group repriced its US$4.95 billion term loan, in another deal led by Credit Suisse. The deal will see Fortescue pay interest at 3.25 percentage points above the LIBOR rate, with a one per cent floor.
The deals highlight the attractiveness of the US market to issuers in Australia and New Zealand. Reynolds Group, controlled by New Zealand’s wealthiest man Graeme Hart, is refinancing loans, bonds and revolvers in the US market.
Earlier this week, Credit Suisse issued $650 million notes for Reynolds Group, priced at 5.625 per cent. The notes are due in 2016.