Ireland-Based Smurfit Kappa Treasury Unlimited Co. Proposed Notes Assigned 'BB+' Rating

LONDON (S&P Global Ratings) Sept. 2, 2019--S&P Global Ratings said today that 
it assigned its 'BB+' issue rating with a '3' recovery rating to the proposed 
€500 million senior unsecured notes due 2027 to be issued by Smurfit Kappa 
Treasury Unlimited Co. The limited amount of prior ranking liabilities 
supports the issue rating.

Smurfit Kappa will use the proceeds of the proposed note issuances to repay 
the outstanding €250 million senior unsecured notes due October 2020 and about 
€250 million of the unsecured notes due June 2021. We will withdraw our 'BB+' 
issue rating and '3' recovery rating on the existing €250 million senior 
unsecured notes due October 2020 upon completion of the refinancing 

Our view of Smurfit Kappa's business risk profile remains unchanged and 
continues to reflect the group's leadership in the corrugated container 
markets, especially in Europe and Latin America. The group is highly 
vertically integrated since it produces most of its paper in its own mills, 
with 75% of its containerboard based on recycled fiber. This allows Smurfit 
Kappa to exhibit better profit margins than its peers because it reduces its 
exposure to volatile containerboard prices. Smurfit Kappa's proven ability to 
generate cost efficiencies, along with its focus on the manufacturing of boxes 
(85% of sales) rather than paper, further support profit margins.

Our view of Smurfit Kappa's financial risk profile also remains unchanged. We 
continue to expect the group's medium-term investment program to weigh on cash 
flow generation and most likely limit any significant improvement in credit 
metrics in the near term. We expect S&P Global Ratings adjusted net debt to 
EBITDA of 2.5x-3.0x and funds from operations to debt of 25%-30% by year-end 

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