S&P rates Berry loans BBB-

S&P said it affirmed the BB+ issuer credit rating on Berry Global Group Inc. and assigned BBB- ratings to Berry's proposed $4.2 billion in first-lien term loans.

The agency also said it affirmed the BBB- rating on Berry's first-lien term loans, but lowered the issue-level ratings on the company's second-lien secured notes to BB from BB+.

The rating actions follow Berry Global Group's agreement to acquire RPC Group plc in a $6.5 billion transaction to be entirely funded with debt financing, S&P said.

The agency said it removed all of the ratings from CreditWatch with negative implications.

The ratings reflect the company's notable improvement in scale, end-market diversification and product breadth as a result of the acquisition, the agency said.

The ratings also consider its increased exposure to the European market and the sizable debt load to fund the transaction, S&P said.

The negative outlook reflects the possibility that weaker-than-expected operating performance or integration challenges could keep leverage at higher than 5x over the next 12- to 18-months post acquisition close, S&P said.

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