Moody's cuts Portola Packaging to D

Moody's Investors Service said it lowered Portola Packaging, Inc.'s probability-of-default rating to D from Ca following the company's announcement that it filed a voluntary petition for Chapter 11 reorganization. Moody's will withdraw all the company's ratings within several days.

The company announced that holders of about 90% of its 8¼% senior notes due 2012 agreed to a restructuring plan where they will receive 100% of the common stock of reorganized Portola in exchange for their claims. Portola anticipates completing its pre-packaged reorganization and emerging from Chapter 11 in mid-October.

Portola also announced that it reached agreement with its existing secured lenders to provide a $79 million debtor-in-possession facility to pay off the outstanding debt under the existing secured facilities and to finance its ongoing operations, Moody's said.

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