By Cristal Cody
Tupelo, Miss., Dec. 11 – Packaging Corp. of America priced $1 billion of fixed-rate senior notes (Baa2/BBB) in two tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company sold $500 million of 2.45% three-year notes at 99.893 to yield 2.487%, or a spread of Treasuries plus 55 basis points.
A $500 million tranche of 3.4% 10-year notes came at 99.672 to yield 3.439%. The notes priced at a spread of 105 bps over Treasuries.
Both tranches priced on the tight side of guidance.
Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the bookrunners.
Proceeds will be used to repay all debt under the company’s term loans, consisting of $626 million outstanding under the 2020 term loan and $350 million under the 2021 term loan, and for general corporate purposes.
The Lake Forest, Ill.-based company manufactures containerboard and corrugated packaging products.
| Issuer: | Packaging Corp. of America
|
| Amount: | $1 billion
|
| Description: | Senior notes
|
| Bookrunners: | Deutsche Bank Securities Inc. and Wells Fargo Securities LLC
|
| Co-managers: | BMO Capital Markets Corp., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, PNC Capital Markets LLC, Williams Capital Group, LP, BB&T Capital Markets, Mizuho Securities USA LLC and U.S. Bancorp Investments, Inc.
|
| Trade date: | Dec. 11
|
| Settlement date: | Dec. 13
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $500 million
|
| Maturity: | Dec. 15, 2020
|
| Coupon: | 2.45%
|
| Price: | 99.893
|
| Yield: | 2.487%
|
| Spread: | Treasuries plus 55 bps
|
| Call features: | Make-whole call at Treasuries plus 10 bps
|
| Price guidance: | Treasuries plus 60 bps area
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Maturity: | Dec. 15, 2027
|
| Coupon: | 3.4%
|
| Price: | 99.672
|
| Yield: | 3.439%
|
| Spread: | Treasuries plus 105 bps
|
| Call features: | Make-whole call at Treasuries plus 20 bps before Sept. 15, 2027; thereafter at par
|
| Price guidance: | Treasuries plus 110 bps area
|
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