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25 Jul 2013

Successful completion of €1.375 billion Senior Credit Facility Re-financing

Re-positions the Group’s debt profile from leveraged to corporate reduces interest costs, extends debt maturity and earnings accretive

Smurfit Kappa Group plc (‘SKG’ or the “Group”) is pleased to announce that it has successfully completed the refinancing of its existing senior secured credit facility with a new 5 year unsecured relationship bank facility. In connection with the refinancing, the collateral securing the obligations under the Group’s various outstanding senior notes and debentures has also been released and the senior notes and debentures are therefore now unsecured. The transition of the capital structure from secured to unsecured reflects the re-positioning of SKG’s credit profile from leveraged to corporate.

 The new €1,375 million 5 year facility comprises a €750 million term loan with a margin of 2.25% and a €625 million revolving credit facility with a margin of 2.00%, reduced from margins of 3.75% and 3.25% respectively. The Group expects cash interest savings from the refinancing will be approximately €13 million per annum and the transaction will be immediately earnings accretive. There will be a one-off exceptional cost of approximately €16 million arising from the accelerated amortisation of unamortised deferred debt issue costs related to the existing facility.

The transaction was initially launched at €1,100 million and was upsized to €1,375 million following a substantial oversubscription. A total of 22 banks, all of whom are SKG relationship banks, have committed to the new facility.

Citi, Crédit Agricole Corporate & Investment Bank, Danske Bank A/S, HSBC Bank plc, JPMorgan Chase Bank N.A. and The Royal Bank of Scotland plc / Ulster Bank Ireland Limited acted as Bookrunners and Mandated Lead Arrangers. The Royal Bank of Scotland plc was sole Co-ordinator.

In addition to the new senior facility, SKG has put in place a 5 year trade receivables securitisation programme of up to €175 million utilising the Group’s receivables in Austria, Belgium, Italy and the Netherlands. The programme, which has been arranged by Rabobank and carries a margin of 1.70%, will complement the Group’s existing €250 million securitisation programme.

Ian Curley, Smurfit Kappa Group CFO, commented: “These transactions re-position SKG’s debt portfolio from a secured leveraged structure post take private in 2002 to an unsecured corporate profile. The new facilities will lower SKG’s overall cost of capital, materially reduce debt servicing costs, enhance earnings and provide greater financial flexibility, including the potential to refinance part of its more expensive bond debt at the appropriate time.”