Linklaters advises banks on first international sustainability-linked bond out of Peru
Offering for packaging company SMI includes cash tender offer and consent solicitation
Linklaters represented Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Santander Investment Securities Inc., as initial purchasers and dealer managers and solicitation agents, in the bond offering by San Miguel Industrias PET S.A. (SMI) and NG PET R&P Latin America, S.A. of $380m senior guaranteed notes due 2028 under Regulation S and Rule 144A.
Linklaters also represented the banks in the concurrent tender offer by SMI for any and all of SMI’s and NG Packaging & Recycling Corporation Holdings S.A.’s senior guaranteed notes due 2022 and the solicitation of consents to amend the related indenture.
The 2028 notes were issued under SMI’s Sustainability-Linked Bond Framework which sets out certain sustainability targets, including increasing the percentage of recycled PET content in preforms and thermoforming products and the tons of post-consumer waste managed by SMI in its operation. Failure to meet both targets by December 31, 2023 will result in a 0.25 percentage point increase to the interest rate payable on the 2028 notes beginning on August 2, 2024.
The 2028 notes bear interest at a rate of 3.500% per annum and the 2022 notes bear interest at a rate of 4.500% per annum.
SMI used part of the proceeds from the 2028 notes offering to purchase US$204,610,000 aggregate principal amount, or 68.20%, of the 2022 notes pursuant to the tender offer, and plans to use the balance of the proceeds to redeem all untendered 2022 notes and repay other indebtedness.
SMI is the leader in rigid plastic packaging solutions in the Andean region, Central America and the Caribbean. It serves the main multinational consumer packaged goods companies in the beverage, food, personal and home care industries.
The Linklaters team was led by partner Conrado Tenaglia and counsel Alejandro Gordano, alongside legal intern Felicitas Lacioppa and foreign attorneys Monica Perez-Banuet Farell and Juan Mata. Counsel Matthew Brigham and associate Bernard Yi supported tax matters on the transaction.