Research Update: Reynolds Group 'B+' Credit Rating Affirmed On Planned Acquisition, Outlook Negative; Pactiv Rating Still On Watch Neg Sep 10

Standard & Poors, September 2010

Abstract
New Zealand-based packaging company Reynolds Group Holdings Ltd. plans to acquire U.S.-based Pactiv Corp. in a highly leveraged transaction totaling approximately $6.5 billion (including fees and expenses). The transaction is subject to Pactiv shareholder approval and customary regulatory approvals. We are affirming our 'B+' corporate credit rating on Reynolds and removing it from CreditWatch. The outlook is negative, primarily reflecting very high debt leverage and integration risks. Based on preliminary terms and conditions and our updated recovery analysis, we are assigning ratings to the various debt instruments Reynolds plans to issue to finance the acquisition as well as one existing but previously unrated term loan. In addition, we are revising the CreditWatch implications for certain existing Reynolds debt instruments and...

Companies mentioned in this report are:
- Reynolds Group Holdings Ltd.
- Pactiv Corp.
- Beverage Packaging Holdings (Luxembourg) II S.A.
- Beverage Packaging Holdings (Luxembourg) I S.A.
- Reynolds Group Issuer (Luxembourg) S.A.
- Reynolds Consumer Products Holdings Inc
- Reynolds Group Holdings Inc.

Action: Affirmed
Action: CreditWatch Update
Action: New Rating
Action: Outlook: Negative
Action: Removed From CreditWatch

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

- Reynolds Group Holdings Ltd.
- Pactiv Corp.
- Beverage Packaging Holdings (Luxembourg) II S.A.
- Beverage Packaging Holdings (Luxembourg) I S.A.
- Reynolds Group Issuer (Luxembourg) S.A.
- Reynolds Consumer Products Holdings Inc
- Reynolds Group Holdings Inc.

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