S&P trims Graphic Packaging unsecured notes

S&P said it lowered its issue-level rating on Graphic Packaging International LLC's senior unsecured notes to BB from BB+ and revised the recovery rating on the notes to 5 from 4. The 5 recovery rating indicates an expectation for modest (10%-30%; rounded estimate: 15%) recovery in the event of a default.

S&P’s BB+ issuer credit rating, as well as the BBB- issue-level rating and 1 recovery rating on Graphic Packaging’s senior secured notes are unchanged. The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

“These rating actions follow the company's announcement that it amended its existing senior credit facility. The amendment, among other things, increased the revolving credit facility to $1.85 billion from $1.45 billion, increased the revolving euro facility to €145 million from €138 million, decreased the revolving yen facility to ¥1.65 billion from ¥2.5 billion, and extended the maturities to April 1, 2026,” S&P said in a news release.

“Although no incremental debt was issued in connection with the amendment, the weakened recovery prospects are driven by our assumption that the upsized revolving credit facility will be 85% drawn in a hypothetical default scenario, resulting in greater secured debt outstanding at default.”

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