Moody's rates Graphic Packaging notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to Graphic Packaging International, LLC's new $400 million of senior unsecured notes due in 2028. The proceeds will be used to repay a portion of the revolver borrowings, fund transaction-related fees and expenses and for general corporate purposes.

Pro forma for the new $400 million debt issuance, leverage increases to 3.3 times as adjusted by Moody's from 2.9 times in the 12 months ended December 2019.

The company's unsecured notes are rated Ba2, one notch below the Ba1 corporate family rating, due to their effective subordination to the sizable senior secured debt. The proposed 2028 notes, the 2027 notes and senior secured credit facilities are guaranteed by Graphic Packaging International Partners, LLC, a holding company that owns the obligor and operating subsidiaries.

The senior unsecured notes due in 2021, 2022 and 2024 are guaranteed by Graphic Packaging Holding Co., another holding company. Moody's views the guarantees as similar and rates both new and existing unsecured notes the same.

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