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Reynolds upsizes term loan to $1.035 billion, trims pricing to Libor plus 425 bps
By Sara Rosenberg
New York, Oct. 27 - Reynolds increased the size of its U.S. term loan to $1.035 billion from $835 million and lowered pricing to Libor plus 425 basis points from Libor plus 500 bps, according to market sources.
In addition, the original issue discount on the term loan was reduced to 99 from talk in the 97 to 98 context, sources said.
The U.S. term loan still contains a 2% Libor floor.
The company's roughly $1.65 billion, up from $1.45 billion, credit facility still includes a $120 million revolver, an €80 million revolver and a €250 million term loan.
Credit Suisse is the lead bank on the deal.
Proceeds will be used to help fund the acquisition of Closure Systems International and Reynolds Consumer Products by Beverage Packaging Holdings, the holding company of SIG Group, which is owned by Rank Group.
Other funds for the acquisition as well as the repayment of existing bank borrowings at Beverage Packaging and existing Reynolds debt 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.
Funds from the term loan upsizing are expected to be used to pay for a larger distribution to the Rank Group.
Closing on the acquisition 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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