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S&P: Rock-Tenn on watch; Smurfit-Stone on positive watch
Standard & Poor's said it placed Rock-Tenn Co.'s BBB corporate credit rating on CreditWatch with negative implications.
The agency also said it placed all of the ratings, including the BB- corporate credit rating, on Smurfit-Stone Container Corp. on CreditWatch with positive implications.
The CreditWatch listings follow news that Rock-Tenn plans to acquire Smurfit-Stone for about $5 billion, which includes about $700 million of Smurfit-Stone's net debt and $700 million of assumed pension liabilities, after-tax, S&P said.
Rock-Tenn has received a financing commitment of about $3.7 billion to fund the transaction and the commitment is structured as a senior credit facility, including a $1.2 billion proposed revolving credit facility, a $1.25 billion proposed term loan A and a $1.252 billion proposed term loan B, the agency said.
The company also contemplates refinancing Smurfit-Stone's existing term loan, which had about $1.2 billion outstanding as of Dec. 31, 2010.
The combined entity would be the second-largest producer of containerboard and coated recycled board in North America with a fiber input mix of about 55% virgin fiber and 45% recycled fiber, S&P said.
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