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Moody’s rates Graphic notes Ba3, facilities Ba1
Moody's Investors Service said it assigned a Ba3 rating to Graphic Packaging International Inc.'s proposed $250 million senior unsecured notes due 2022.
Proceeds are expected to be used to refinance all $250 million of 7 7/8% senior notes due 2018, at which point the ratings on the 2018 notes will be withdrawn.
The agency also assigned a Ba1 rating to Graphic's amended credit facilities, including a $1 billion amortizing term loan facility, a $1.25 billion revolving credit facility, a €138 million European revolving credit facility and a ¥2.5 billion Japanese revolving credit facility, all of which will mature Oct. 1, 2019.
These facilities replace the company's old facilities that were set to mature on Sept. 13, 2018 and included $1.3 billion in term loans, a $1 billion revolver and foreign revolvers of €138 million and ¥2.5 billion. The ratings on the old facilities were withdrawn.
The company's existing ratings remain unchanged, including Ba2 corporate family rating and probability of default rating of Ba2-PD.
The outlook is stable.
The transaction is expected to be leverage neutral.
Moody’s said the Ba2 corporate family rating reflects Graphic Packaging's modest product and geographic diversification, coupled with strong market presence in a consolidated industry, stable end markets (food and beverage), and continued steady operating performance.
The ratings incorporate the agency’s expectation of continued reduction in leverage and are supported by the company's relatively low cost vertically integrated asset base but constrained by its exposure to volatile fiber and energy costs and the expectation of continued acquisitions.
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