KP Tissue Inc. Successfully Closes Senior Unsecured Notes Offering
KP Tissue Inc. (KPT) recently announced the successful closure of a significant offering of senior unsecured notes. This financing effort marks a pivotal step for Kruger Products Inc. (KPI), involved in this strategic move to bolster its financial stability and operational capabilities.
Details of the Offering
KPI issued a total of CDN $165 million in principal amount of 6.250% Senior Unsecured Notes. The maturity of these notes is set for December 10, 2032. Interest payments will be made semi-annually starting June 10, 2026. The proceeds from this offering will enable KPI to address its existing financial obligations while also repositioning itself for growth.
Utilization of Proceeds
A substantial portion of the funds raised will be allocated to repay the outstanding borrowings associated with the senior credit facilities of Kruger Products SB Inc. (KPSB). This move is expected to provide KPI with a more robust balance sheet to support its operational strategies. The remaining funds will be employed for general corporate purposes, allowing KPI to invest further in its ongoing projects and initiatives.
Amendments to Credit Agreement
In conjunction with the offering, the existing syndicated credit agreement was amended and restated. This amendment increases the total facility amount from CDN $230 million to CDN $250 million and expands the accordion feature from CDN $75 million to CDN $100 million. This adjustment ensures that KPI is positioned to leverage additional capital as needed.
About KP Tissue Inc.
KP Tissue Inc. was established with the purpose of holding equity interest in KPI, which is reflected in its investment management strategy. Currently, KPT holds a 12.1% interest in KPI, signifying a substantial commitment to supporting KPI’s vision and operational goals.
About Kruger Products Inc.
KPI stands as Canada’s foremost manufacturer of tissue products quality renowned for serving both household and commercial markets. With a diverse portfolio including popular brands like Cashmere, Purex, SpongeTowels, Scotties, and Bonterra, KPI effectively meets the wide-ranging needs of consumers. Furthermore, KPI extends its manufacturing capabilities in the U.S. through the White Cloud brand along with various private labels. The Away-From-Home division concentrates on offering innovative and cost-effective solutions tailored for commercial and public sectors.
Future Directions
The management at KPI is optimistic about how these changes will shape the company’s future. By strategically utilizing the funds generated through the recent notes offering, KPI aims to enhance its operations and further its market reach. Ensuring that they remain adaptable to market conditions is essential for KPI as it navigates its growth trajectory.
Company Contacts
If you have any queries or require further information, please feel free to reach out:
François Paroyan
General Counsel and Corporate Secretary
905-812-6936
francois.paroyan@krugerproducts.ca
Doris Grbic
Director, Investor Relations
437-882-2596
ir@krugerproducts.ca
Frequently Asked Questions
What are the key highlights of the recent notes offering?
The offering raised CDN $165 million at a 6.250% interest rate, maturing in 2032, aimed at strengthening KPI’s financial position.
How will the proceeds from the notes be used?
Proceeds will repay senior credit borrowings and support general corporate purposes, strengthening KPI's balance sheet.
What amendments were made to the credit agreement?
The credit agreement was amended to increase the facility limit to CDN $250 million and change the accordion feature limit to CDN $100 million.
What is the role of KP Tissue Inc. in Kruger Products?
KP Tissue Inc. primarily holds equity interests in Kruger Products, reflecting a significant stake in the operations and future prospects of the company.
What is the market position of Kruger Products Inc.?
KPI is considered Canada’s leading tissue product manufacturer, recognized for quality and a strong range of household and commercial brands.
