Reynolds Group Holdings, the packaging company owned by New Zealand billionaire Graeme Hart, will meet lenders in New York on July 11 as it seeks to fund its US$1.68 billion acquisition of Graham Packaging.
Reynolds Group will finance the bid with US$2 billion ($2.4 billion) of new senior debt, and
will seek to amend the terms on another US$2 billion of term loans under an existing credit agreement, the company said in a statement distributed by Business Wire yesterday.
Reynolds Group said on June 17 that it plans to borrow as much as US$5 billion to pay for Blackstone Group LP's Graham Packaging, prompting Moody's Investors Service and Standard & Poor's to consider cutting its ratings deeper into junk.
The company led by Hart, New Zealand's richest man, is buying Graham to gain a plastic-container company with customers such as PepsiCo, maker of Gatorade and Tropicana beverages.
Reynolds, a unit of Hart's Rank Group, will pay Graham investors US$25.50 a share for the York, Pennsylvania-based plastic-container maker. That's equal to about US$4.5 billion with the assumption of Graham's debt.
Moody's has said it would review its B2 ranking on Reynolds Group for possible downgrade and Standard & Poor's said it would consider cutting its B+ rating after the acquisition was announced.
- Bloomberg
