Reynolds' $1 billion term B offered at 98, $500 million term A at 99

By Sara Rosenberg

New York, Sept. 13 - Reynolds Group Holdings Ltd.'s $1 billion term loan B is being offered to investors at an original issue discount of 98, while its $500 million term loan A is being offered at a discount of 99, according to a market source.

Price talk on the term loan B is Libor plus 500 basis points and price talk on the term loan A is Libor plus 450 bps, with both tranches carrying a 2% Libor floor.

The term loan B includes 101 soft call protection for one year.

Credit Suisse, HSBC and Australia and New Zealand Banking Group are the lead banks on the $1.5 billion of term loan debt (Ba3) that was launched with a bank meeting on Monday.

Proceeds from the term loans, along with $3.5 billion of bonds and roughly $2 billion of equity, will be used to fund the acquisition of Pactiv Corp.

Under the agreement, Pactiv shareholders will receive $33.25 in cash per share for a total purchase price of $4.6 billion. However, the transaction is valued at $6 billion.

Closing is targeted by the end of this year, subject to Pactiv shareholder approval, regulatory approvals and customary conditions. The acquisition is not conditioned on the receipt of equity or debt financing.

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

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