Graphic Packaging details new $1.6 billion credit facility for Altivity purchase

By Sara Rosenberg

New York, Dec. 10 - Graphic Packaging International Inc. detailed its proposed $1.6 billion senior secured credit facility that is being done in connection with the merger between Graphic Packaging Corp. and Altivity Packaging, LLC, according to a DEFM14A filed with the Securities and Exchange Commission Monday.

Bank of America, JPMorgan and Goldman Sachs are the joint bookrunners on the deal.

The new facility consists of a $1.2 billion term loan due May 16, 2014 and a $400 million revolver due May 16, 2013.

The company's existing $1.055 billion term loan will remain in place, with the maturity date remaining unchanged at May 16, 2014, and be subject to the same documentation governing the new credit facility. Currently, this existing term loan carries pricing of Libor plus 200 bps.

The weighted average interest rate on the new term loan and on the existing term loan is expected to be Libor plus 225 basis points, subject to limited adjustment.

The interest rate on the revolver is expected to range from Libor plus 175 bps to 225 bps depending upon Graphic's consolidated leverage ratio, subject to limited adjustment.

The new revolver will replace the Graphic Packaging's existing $300 million revolver due March 16, 2013 that carried initial pricing of Libor plus 225 bps and will be available for general corporate purposes.

In addition to helping fund the merger, proceeds from the term loan will be used to refinance Altivity's first- and second-lien credit facility.

Under the terms of the transaction, Graphic Packaging will merge into the newly formed company, with each existing share of Graphic Packaging common stock being converted into a share of common stock in the new company.

Affiliates of TPG Capital and the management owners of Altivity will contribute all of their equity interests in Altivity's holding company to the new company in exchange for shares of the new company's common stock.

Upon closing, Graphic Packaging's current shareholders will initially own about 60% of the new company's common stock, while the shareholders of Altivity will initially own about 40%.

Graphic Packaging will hold a special meeting for stockholders to vote on the transaction on Jan. 17, 2008.

Graphic Packaging is a Marietta, Ga.-based paperboard packaging company. Altivity is a Chicago-based producer of folding cartons.

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