Packaging Corp of America's purchase pushed through bridge loan
A USD2 billion financing commitment was made available to Packaging Corp of America, a producer of corrugated shipping material. The company would be replacing a 364 day bridge loan provided by Bank of America Corp with a lengthier debt that would include as much as USD700 million in senior notes and USD1.3 billion in term loans. The term loans consisted of a seven year portion and five year part and this was confirmed by regulatory documents filed yesterday.
Previously, Packaging Corp had agreed to purchase the Boise, Idaho-based manufacturer of packaging and paper products for the price of USD1.27 billion in cash. The whole price increases to USD2 billion as the USD714 million outstanding debt according to joint statement from the companies made last September 16.
Packaging Corp is further seeking a USD350 million five year revolving credit facility. This though would not be used to provide finances for the acquisition or refinance the absorbed debt according to the filing. The company projects the purchase to be completed by the fourth quarter of the year.