Published on 11/18/2019 in the Prospect News Investment Grade Daily.
New Issue: Packaging Corp. of America sells $900 million notes in two parts
By Cristal Cody
Tupelo, Miss., Nov. 18 – Packaging Corp. of America priced $900 million of senior notes (Baa2/BBB) in two tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.
Packaging Corp. sold $500 million of 3% 10-year notes at 99.869 to yield 3.015%, or a spread of Treasuries plus 120 basis points.
A $400 million tranche of 4.05% 30-year notes priced at 99.12 to yield 4.101% and a Treasuries plus 180 bps spread.
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 redeem the company’s 2020 notes and 2022 notes.
The Lake Forest, Ill.-based company manufactures containerboard and corrugated packaging products.
| Issuer: | Packaging Corp. of America
|
| Amount: | $900 million
|
| Description: | Senior notes
|
| Bookrunners: | Deutsche Bank Securities Inc. and Wells Fargo Securities LLC
|
| Co-managers: | BMO Capital Markets Corp., BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC, Siebert Williams Shank & Co., LLC, BB&T Capital Markets, Mizuho Securities USA LLC and U.S. Bancorp Investments, Inc.
|
| Trade date: | Nov. 18
|
| Settlement date: | Nov. 21
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Maturity: | Dec. 15, 2029
|
| Coupon: | 3%
|
| Price: | 99.869
|
| Yield: | 3.015%
|
| Spread: | Treasuries plus 120 bps
|
| Call features: | Make-whole call at Treasuries plus 20 bps before Sept. 15, 2029; thereafter at par
|
| Price guidance: | Treasuries plus 125 bps area, plus or minus 5 bps; initial talk at Treasuries plus 140 bps area
|
|
|
| 30-year notes
|
| Amount: | $400 million
|
| Maturity: | Dec. 15, 2049
|
| Coupon: | 4.05%
|
| Price: | 99.12
|
| Yield: | 4.101%
|
| Spread: | Treasuries plus 180 bps
|
| Call features: | Make-whole call at Treasuries plus 30 bps before June 15, 2049; thereafter at par
|
| Price guidance: | Treasuries plus 185 bps area, plus or minus 5 bps; initial talk at Treasuries plus 205 bps area
|
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