Moody's may drop Pactiv

Moody's Investors Service said it placed the senior unsecured debt ratings of Pactiv Corp. under review for possible downgrade from a stable outlook.

The review follows the company's announcement that it has entered into a definitive merger agreement to be acquired by Reynolds Group Holdings Ltd. (B2, stable), the agency said.

The transaction is valued at about $6 billion, the agency noted.

Moody's added that Reynolds is considerably weaker credit metrics than Pactiv and is rated significantly lower at B2 stable. For the 12 months ended March 31, Pactiv's debt to EBITDA and EBIT interest coverage were 3.4 times and 3.8 times, respectively, the agency said.

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