Marietta, Georgia, USA, 13 August 2009 -- /PRNewswire/ -- Graphic Packaging International, Inc., a wholly-owned subsidiary of Graphic Packaging Holding Company (NYSE: GPK), announced today that it has entered into an agreement to sell USD 180 million aggregate principal amount of senior notes due 2017 offered pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Senior Notes will bear interest at an annual rate of 9.5% and will be issued at a price equal to 103.0% of the principal amount thereof, which equates to an effective yield to maturity of approximately 8.95%. Graphic Packaging expects to close the offering on 20 August 2009, subject to the satisfaction of customary closing conditions.
The Senior Notes will be guaranteed by Graphic Packaging Holding Company and Graphic Packaging Corporation, and by certain of Graphic Packaging's domestic subsidiaries who have guaranteed obligations under its senior credit facilities, existing notes, and certain other indebtedness.
Graphic Packaging estimates that the gross proceeds from this offering will be approximately USD 185.4 million. The proceeds from the offering will be used to redeem the remaining approximately USD 180.0 million aggregate principal amount of Graphic Packaging's 8.50% senior notes due 2011, to pay accrued interest on the 2011 notes and to pay fees and expenses incurred in connection with the offering and the redemption. The Senior Notes have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws.
In connection with the redemption of the 2011 notes, Graphic Packaging has delivered notice to U.S. Bank National Association, the indenture trustee of the 2011 notes, of its election to redeem the remaining outstanding balance of the 2011 notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date. Under the terms of the indenture, the notes are redeemable at par at the company's option beginning 15 August 2009. The notes will be redeemed in accordance with their terms and the company expects the redemption to occur on or about 13 September 2009. On the redemption date, the redemption price will become due and payable, and interest on the 2011 notes will cease to accrue. After the redemption described in this press release and the redemption previously announced on 04 August 2009, of approximately USD 20.0 million aggregate principal amount of the 2011 notes, all of the Graphic Packaging's 2011 notes will have been paid in full.
Graphic Packaging International, Inc., a subsidiary of Graphic Packaging Holding Company (NYSE: GPK), headquartered in Marietta, Georgia, is a leading provider of packaging solutions for a wide variety of products to food, beverage, and other consumer products companies. The company is the largest global producer of folding cartons and holds a leading market position in coated unbleached kraft paperboard, coated-recycled boxboard, and specialty bag packaging. Additional information about Graphic Packaging, its business, and its products is available at www.graphicpkg.com.