Rock-Tenn amends credit facility, will repay $120 million term loan B

By Angela McDaniels

Tacoma, Wash., Feb. 5 - Rock-Tenn Co. amended its credit facility on Wednesday to adjust its ability to borrow unsecured debt, according to the company's 10-Q report for the fourth quarter filed with the Securities and Exchange Commission on Friday.

The ability to borrow unsecured debt is subject to some conditions outlined in the amendment, including a maximum leverage ratio.

If the debt is incurred on June 30, 2011 or before, this ratio cannot exceed 3.5 to 1. If the debt is incurred after that date, the ratio cannot exceed 3.25 to 1. The ratio is calculated on a pro forma basis.

In conjunction with this amendment, the company will repay the $120 million outstanding term loan B balance by Feb. 12 with the proceeds from its revolving credit facility.

Rock-Tenn expects to record a loss on the extinguishment of this debt of approximately $2 million, primarily for unamortized deferred financing costs.

The credit facility includes a $450 million revolver, a $550 million term loan A facility and a $200 million term loan B facility.

Wachovia Bank, NA is the administrative agent.

RockTenn is a Norcross, Ga., manufacturer of paperboard, containerboard, consumer and corrugated packaging and merchandising displays.

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