Imark
Forumer storico
Il forestry & paper in occidente è tutto messo male, chi più, chi meno... Sappi è un produttore sudafricano che ha recentemente rilevato asset di M-Real che ha ccorpato a quelli che già aveva in Europa, ti confesso che non lo seguo da vicino...
Il bond è senior secured, i suoi proventi dovrebbero essere destinati a sostituire preesistenti linee di credito bancarie.
Se leggi inglese, il commento di Moody's all'emissione.
Moody's assigns (P)Ba2 rating to Sappi's proposed secured notes and downgrades existing bonds to B2
Frankfurt, July 20, 2009 -- Moody's Investors Service has today assigned a provisional (P)Ba2 rating to the proposed senior secured notes of up to USD500 million due 2014 to be issued by PE Paper Escrow GmbH (the "issuer"), a special purpose Austrian limited liability company. The proceeds of the notes issuance will be applied to reduce outstanding indebtedness.
The outcome of the provisional rating is closely correlated to the final proportion of secured debt in the company's capital structure, consequently the final application of net proceeds towards reduction of unsecured or secured debt could impact the instrument's recovery prospects and hence might improve the definitive rating by a maximum of one notch.
Based on the assumption that the new instruments will be successfully placed as proposed, the ratings of the outstanding USD750 million senior unsecured notes issued by the holding company Sappi Papier Holding GmbH ("SPH") have been downgraded to B2 from Ba3 due to the increasing proportion of secured debt in Sappi's capital structure ranking ahead and lower recovery prospects for the unsecured notes. At the same time, Moody's affirmed the Ba3 corporate family rating (CFR) and the probability of default rating (PDR) of Sappi Ltd ("Sappi" or "the company") with a stable outlook.
The proceeds of the offering are expected to be immediately placed into escrow by the issuer and will be streamed on to SPH once the conditions for a release are completed. Upon satisfaction of the escrow conditions, which includes the refinancing of Sappi's bank debt, the amendment of certain other debt facilities of Sappi, and other customary conditions, the issuer will become an indirect wholly owned subsidiary of Sappi Limited. The notes offering is one component of a refinancing that Sappi is undertaking which is expected to be finalized within the next weeks. Besides the senior secured notes, the refinancing consists of a new revolving credit facility in an amount of up to EUR400 million to replace an existing EUR600 million revolving credit facility, and a new OeKB term loan facility in an amount of up to EUR400 million to refinance an existing term loan with an identical face value.
The notes together with the refinanced bank debt and certain other indebtedness will benefit from upstream guarantees on a senior basis of essentially all material operating subsidiaries of Sappi's international business excluding South African operations. In addition, these aforementioned instruments are partially secured as they will benefit from a first-lien security interest in certain of Sappi's subsidiaries' property, plant and equipment, real estate and inventories, as well as share pledges on the stock of certain of Sappi's operating subsidiaries. Furthermore the notes will benefit from a senior downstream guarantee provided by the ultimate holding company Sappi Ltd. This guarantee, secured by a pledge of shares in Sappi Manufacturing Ltd, however reflects only the equity proportion of Sappi Ltd in the South African operations as Sappi Ltd itself does not have any cash-generating functions. Therefore the downstream guarantee from Sappi Ltd is subordinated to creditor's at the level of South African operations.
The (P)Ba2 rating assigned to the senior secured notes is one notch above the company's Ba3 CFR and reflects the relative seniority and security package of the new instrument in Sappi's capital structure pari passu with the new bank debt as reflected in a Loss Given Default ("LGD") assessment of LGD 2 (29%). As a result of the upstream guarantees, Moody's ranks the new instruments pari passu with all other claims with a similar proximity to assets and cash flows as the guarantees mitigate structural subordination of SPH. Relative to other secured and unsecured liabilities in the company's capital structure, the notes and the secured bank debt are expected to have slightly higher recovery prospects due to the partial security as reflected in a rating with a one notch difference to the CFR.
Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction. The outcome of the provisional rating is closely correlated to the final proportion of secured debt in the company's capital structure, consequently the final application of net proceeds towards reduction of unsecured or secured debt could impact the instrument's LGD rate and hence might improve the definitive rating by a maximum of one notch. Upon a conclusive review of the final versions of all the documents, confirmation of issuance proceeds and application of proceeds, Moody's will assign a definitive rating to the transaction.
The ratings of the existing USD500 million global bonds due 2012 and the USD250 million global bonds due 2032 issued by the holding company SPH have been downgraded to B2 (LGD 6, 91%) from Ba3 (LGD 4, 51%) under the assumption that the notes will be successfully placed and the refinancing of bank debt will be realised. The downgrade reflects the implemented effective subordination relative to an increasing amount of senior secured debt ranking ahead in the capital structure with a closer proximity to operating cash flows and assets. The existing unsecured notes only benefit from a downstream guarantee by the ultimate holding company of Sappi Ltd on an unsecured basis which ranks junior relative to the new debt, and an upstream guarantee from the holding company Sappi International, to be shared with the new senior secured instruments.
The rating affirmation of the Ba3 CFR and PDR reflects Moody's view that the proposed transaction is in line with Moody's expectations (for the current rating category with a stable outlook) of a timely refinancing of upcoming debt maturities and maintenance of sufficient headroom under financial covenants. Moody's notes that a successful issuance of the new instruments does improve the company's debt maturity profile and expects that refinanced bank debt will contain a revised set of financial covenants which will provide a higher headroom.
Moody's recognises that the operating environment in the global paper and forest products industry remains challenging, with significantly lower demand levels for coated fine paper while pricing levels in Europe remain favourable. The rating affirmation reflects Moody's expectation that recent performance erosion will stabilise over the next quarters and that Sappi will continue to restore credit metrics and generate positive free cash flows to support the company's liquidity cushion which are key requirements to mitigate downwards rating pressure. The performance stabilisation is expected to be supported by management's disciplined capacity management to adjust for weakening demand, tight cost management and the realisation of synergies from the M-real graphic paper asset acquisition, but also benefits from lower input costs which should gradually be visible in the company's profitability over the next quarters.
Assignments:
..Issuer: PE Paper Escrow GmbH
....Senior Secured Regular Bond/Debenture, Assigned (P)Ba2 (LGD2, 29%)
.... Stable Outlook Assigned
Downgrades:
..Issuer: Sappi Papier Holding GmbH
....Senior Unsecured Regular Bond/Debenture, Downgrade to B2 from Ba3, (LGD 6, 91% changed from LGD 4, 51%)
The last rating action was implemented on 3 June 2009, when the Corporate Family Rating was downgraded from Ba2 with a negative outlook to Ba3 with a stable outlook.
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[FONT="]Sappi Ltd, domiciled in Johannesburg, South Africa, is among the leading global producers of coated fine paper with group sales of USD5.9 billion in FY 2008 (ended September)[/FONT]
