Norske Skogindustrier ASA (NSG)’s benchmark five-year euro note rose as the second-largest maker of newsprint repaid a maturing bond, giving it more than two years reprieve until the next debt maturity.
The yield on the 7 percent 2017 senior unsecured note dropped 47 basis points to 17.79 percent as of 3:04 p.m. in Oslo, the lowest since Feb. 16. The spread against the benchmark euro curve narrowed 63 basis points to 16.9 percentage points, the lowest level in almost two weeks.
Norske Skog is grappling with 7.9 billion kroner ($1.41 billion) in debt after three straight quarters of losses amid too much supply in the newsprint market, competition from online media and rising raw-material prices. Yields on the five-year note reached 32.5 percent on Oct. 24 on concern the company wouldn’t be able to repay the maturing debt.
The 1 billion-krone floating rate unsecured note was repaid on maturity yesterday, Carsten Dybevig, spokesman for the Lysaker, Norway-based company, said today by phone.
The company on Feb. 8 reported that cash flow rose almost fourfold to 409 million kroner in the fourth quarter, helped by rising newsprint prices and falling costs. Debt fell 3 percent in the quarter to 7.86 billion kroner. The company has market value of 1.1 billion kroner.
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