Nine banks, including ANZ, BNZ and Westpac, have joined Graeme Hart's long-term adviser Credit Suisse in refinancing NZ$1.45 billion of debt at the Hart owned Carter Holt Harvey that was due to mature this year, The Australian Financial Review reports.
The AFR said "keen interest" in the leveraged loan reflects the strength of both Hart's banking relationships and the wood supplies and pulp and paper packaging sector.
The banks joining Credit Suisse are ANZ, BNZ, Westpac, ASB's parent Commonwealth Bank of Australia, Rabobank, HSBC, Bank of Scotland International, Mizuho Corporate Bank, and Sumitomo Mitsui, the AFR reported, with each underwriting about NZ$150 million.
The loan reportedly pays margins of between 400 and 425 basis points over the New Zealand bank bill reference rate (BKBM) for the five-year debt. The AFR says the deal is leveraged at four times earnings and includes NZ$1.34 billion in fully-drawn term loans and NZ$100 million in revolving facilities for Carter Holt's two main businesses, - its wood products and pulp and paper packaging operations.
Hart tried unsuccessfully to sell Carter Holt's pulp, paper and packaging business earlier this year. He also failed to sell Carter Holt's Wood Products business in 2007, including the Carters chain of distribution stores and wood based building products manufacturing and marketing operations.
Hart bought Carter Holt for NZ$3.3 billion in 2006 and delisted the company from the New Zealand sharemarket. Auckland-based Hart now runs Reynolds Group Holdings, the world’s second biggest food and drink packaging maker, which has debts of about US$18 billion. According to Forbes magazine, Hart is worth US$5.5 billion.
In March Hart received Overseas Investment Office consent to sell more than 17,000 hectares of Central North Island forestry blocks to a United States led group for an undisclosed sum.