Berry Plastics Group Seeks $1 Billion Term Loan to Repay Bonds

Berry Plastics Group Inc., the Apollo Global Management LLC-controlled packaging company that went public last year, is seeking a $1 billion incremental loan under an existing credit pact.

Proceeds of the debt will be used to redeem the company’s second-priority senior secured floating-rate notes due in 2014, first priority bonds maturing in 2015 and 10.25 percent issue that comes due in 2016, the Evansville, Indiana-based company said today in a statement distributed by Business Wire.

Credit Suisse AG, the bank leading the transaction, is hosting a lender call today at 1:30 p.m. in New York, according to a person with knowledge of the matter.

The $1 billion term loan, which won’t have financial maintenance covenants, will pay interest at 3 percentage points more than the London interbank offered rate and will have a 1 percent minimum on the lending benchmark, said the person, who declined to be identified because the terms are private. Berry Plastics may sell the seven-year debt at 99.5 cents on the dollar, the person said.

Eva Schmitz, a company spokeswoman, didn’t immediately respond to an e-mail seeking comment about the transaction.

Berry Plastics at the end of fiscal 2012 had total debt of $4.47 billion, it said in a Dec. 17 regulatory filing. A $1.2 billion term loan matures in 2015 and a $650 million asset-based revolving line of credit comes due in June 2016, according to the company.

Bond Prices

The company’s $225 million of notes due in 2014 last traded at 100.1 cents on the dollar on Jan. 14, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. Its $680.6 million bond maturing in 2015 last traded at 100.375 cents on the dollar on Jan. 9, while the $168 million outstanding of 10.25 percent notes due in 2016 last traded at 102.75 cents on Jan. 15, Trace data show.

Apollo and Graham Partners Inc. purchased Berry Plastics from Goldman Sachs Group Inc. and JPMorgan Chase & Co. for an enterprise value of $2.25 billion in 2006, according to a statement at the time.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

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