Graham Packaging begins marketing $510 million eight-year notes; initial talk 7½%-7¾%

By Paul A. Harris

Portland, Ore., July 23 – Graham Packaging Co. Inc. was set to kick off a $510 million offering of eight-year senior notes on a late Thursday morning conference call with investors, according to market sources.

Initial talk has the deal coming to yield 7½% to 7¾%, a trader said.

The deal is expected to price on July 29.

Credit Suisse Securities (USA) LLC is the left lead bookrunner. HSBC Securities (USA) Inc. is the joint bookrunner.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback and a 101% poison put.

The issuing entity will be GPC Merger Sub Inc., which is to be merged with and into Graham Packaging Co.

The York, Pa.-based supplier of plastic packaging solutions plans to use the proceeds, together with borrowings under the credit agreement that will govern the senior facilities, to settle balances with and make distributions to Reynolds Group Holdings LLC.

Graham Packaging announced on June 17 that it signed a definitive merger agreement to be acquired by Reynolds Group in an all-cash transaction valued at $4.5 billion, including assumed debt.

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