Reynolds $835 million term loan talked at Libor plus 450 to 500 bps

By Sara Rosenberg

New York, Oct. 19 - Reynolds' proposed $835 million term loan is being talked at Libor plus 450 basis points to 500 bps with a 2% Libor floor and an original issue discount of 98, according to a market source.

And, the company's $120 million revolver is also being talked at Libor plus 450 bps to 500 bps with a 2% Libor floor, the source said.

Credit Suisse is the lead bank on the deal that will launch with a bank meeting on Tuesday morning.

The roughly $1.45 billion credit facility also includes an €80 million revolver and a €250 million term loan.

Proceeds will be used to help fund the acquisition of Closure Systems International and Reynolds Consumer Products by Beverage Packaging Holdings.

Other funds for the acquisition will come from $1.1 billion of senior secured notes, €450 million of senior secured notes, €116 million of existing cash and €500 million of equity.

In addition to helping fund the acquisition, the senior secured debt also will repay existing bank borrowings at Beverage Packaging of around €485 million and repay existing Reynolds debt.

The total purchase price for the companies is $3.023 billion, or 7.7 times LTM adjusted pro forma EBITDA.

Closing is expected to take place in the fourth quarter and the combined entity will assume the Reynolds name.

Reynolds is a manufacturer of aluminum foil, wraps and bags. Closure Systems is a manufacturer of plastic caps and closures, primarily serving the beverage market. And, Beverage Packaging is a manufacturer of aseptic carton packaging systems.

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