Moody's Rates Planned Graphic Packaging Offer 'B3'

NEW YORK (AP) — Moody's Investors Service assigned a "B3" rating to $180 million in senior notes due 2017 proposed for an offering by consumer products packaging maker Graphic Packaging International.

The company plans to offer the notes in addition to $245 million of its 9.5 percent senior notes due 2017 issued under a June 16 indenture. Proceeds will be used to redeem existing 8.50 percent senior notes due 2011 and pay related fees and expenses.

Moody's affirmed its "B1" corporate family rating for Graphic Packaging, as well as the company's other debt ratings. The ratings agency also affirmed the company's SGL-3 speculative grade liquidity rating and said its outlook remains negative.

Moody's said the ratings assignment and affirmation reflect Graphic Packaging's leading position in folding consumer cartons, coated unbleached kraft paperboard, coated recycled boxboard and multi-wall bag.

The ratings also reflect the company's continued focus on cost improvements and margin stability, the agency said.

The agency said the ratings consider the company's adequate liquidity profile, which consists of a $161 million cash balance with no near-term debt maturities after the completion of recent refinancing transactions.