Berry Plastics Said to Seek $1.13 Billion Loan for Refinancing

Berry Plastics Group Inc., the Apollo Global Management LLC-controlled packaging company that went public last year, is seeking a $1.13 billion covenant-light term loan to refinance bank debt, it said today in a statement distributed by Business Wire.

Credit Suisse Group AG is leading the financing and will host a lender call today at 2 p.m. in New York, according to a person with knowledge of the transaction.

Berry, based in Evansville, Indiana, is proposing to pay interest at 2.75 percentage points to 3 percentage points more than the London interbank offered rate on the seven-year loan, with a 1 percent minimum on the lending benchmark, said the person, who asked not to be identified because the terms aren’t set. Lenders will receive six months of call protection at 101 cents, meaning Berry would have to pay a one-cent premium to reprice the debt in its first six months.

Proceeds of the loan will be used to refinance a $1.12 billion term C piece the company obtained in 2006 and which expires in April 2015, according to the statement. The debt pays interest at 2 percentage points more than Libor, according to data compiled by Bloomberg.

Lenders must submit commitments to Credit Suisse by Dec. 17, the person said.

Covenant-light loans lack standard protections for lenders such as limits on the amount of debt a company can have relative to its cash flow.

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