Packaging Corp. Gets $2 Billion Bridge Financing for Boise DealChristine Idzelis
Packaging Corp. of America, a producer of corrugated shipping boxes, got a $2 billion financing commitment for its purchase of Boise Inc.
The company plans to replace a 364-day bridge loan being provided by Bank of America Corp. with longer-term debt that may include as much as $700 million of senior notes and $1.3 billion of term loans consisting of a seven-year portion and five-year piece, according to a regulatory filing yesterday.
Packaging Corp. agreed to buy the Boise, Idaho-based maker of packaging and paper products for about $1.27 billion in cash. The deal is valued at about $2 billion including Boise’s $714 million outstanding debt, according to joint company statement on Sept. 16.
Lake Forest, Illinois-based Packaging Corp. is also seeking a $350 million five-year revolving credit line, which will not be used to fund the acquisition or refinance debt, according to the regulatory filing. The company expects the purchase will be completed in the fourth quarter.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.