Reynolds upsizes bank loans to $2 billion, cuts bonds by $500 million

By Paul A. Harris

St. Louis, Sept. 24 - Reynolds Group Holdings Ltd. shifted $500 million to its credit facility from its high-yield bond offer on Friday, according to an informed source.

The bank deal is upsized to $2 billion from $1.5 billion. The bonds are downsized to $3 billion from $3.5 billion.

Meanwhile talk tightened on the credit facility.

The upsized $1.5 billion term loan is talked at Libor plus 475 basis points, 25 bps lower than previous talk of 500 bps. The Libor floor moves down to 1.75% from 2%. Talk for the original issue discount is increased to 99 from 98.

The term loan B, which was upsized from $1 billion, features a 101 soft call.

Commitments are due on Monday.

The facility also includes a $500 million term loan A which remains talked at Libor plus 450 bps at 99. However the Libor floor of the term A is decreased to 1.75% from 2%.

The junk bond deal, which will come to market later, features secured and unsecured tranches, with sizes remaining to be determined.

Credit Suisse, HSBC and Australia and New Zealand Banking Group are the leading the debt financing which will be used to help fund the acquisition of Pactiv Corp.

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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