S&P rates Silgan loan BBB-

Standard & Poor's said that it assigned a BBB- issue ratings and 1 recovery ratings to Silgan Holdings Inc.'s proposed revolving credit facility due 2016 and term loan A due 2017. The 1 recovery rating indicates very high (90%-100%) recovery prospects in the event of payment default.

The corporate credit rating and existing debt ratings on Silgan Holdings remain on CreditWatch with negative implications, where they were placed on April 13 following Silgan's definitive merger agreement to acquire Graham Packaging Co. for $4.5 billion.

The corporate credit and debt issue ratings on Graham remain on CreditWatch with positive implications.

The companies expect the acquisition, which is subject to shareholder and regulatory approvals, to close in the third quarter of 2011, the agency said. If the transaction goes through as planned, S&P expects to lower its corporate credit rating on Silgan to BB from BB+ and remove the ratings from CreditWatch.

The expected downgrade would reflect the increase in debt incurred in connection with the acquisition, the agency added. The acquisition of Graham Packaging will strengthen Silgan's satisfactory business risk profile by augmenting its scale, product mix and customer diversity.

© 2015 Prospect News.
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