King & Wood Mallesons has acted as Australian counsel for the Joint Lead Arrangers J.P. Morgan, Bank of America, Barclays Bank, HSBC and Deutsche Bank on Pact Group’s $1 billion refinancing, which included a US$885 million Term Loan B facility (TLB), one of the largest TLB financings for an Australian borrower to date.
In addition to the US$885 million TLB, the Pact Group financing includes an A$75 million revolving facility and a NZ$30 million revolving facility. The financing also involved Pact Group entering into arrangements to hedge against currency and interest rate fluctuations in relation to the loan with several of the Joint Lead Arrangers and other swap providers. The US TLB was attractive to Pact Group because it offered competitive pricing, longer loan tenor and less restrictive financial covenants than those usually found in the Australian bank loan market.
The financing closed on 29 May 2012 and was provided to assist in the refinancing of existing debt and for working capital and other general corporate purposes. The TLB and revolving facilities are secured by a security package over most of the assets of the Pact Group, located primarily in Australia and New Zealand.
Pact Group is a leading global provider of rigid plastic and steel packaging. It has design and manufacturing operations in Australia, New Zealand and Asia, and provides innovative packaging solutions to multi-national customers in both the consumer and industrial segments. It is best known for its packaging of food and beverage, pharmaceutical and chemical products.
The King & Wood Mallesons team was led by Banking Partner Richard Hayes, who was assisted by other members of the team including Partners Scott Farrell (Banking) and Scott Heezen (Tax); Special Counsel Stuart Courtney (Stamp Duty); Senior Associates Lynton Hogan (Banking), Greg Nicholas (Banking) and David Anderson (Tax); and Associates Claire Warren, Andrew Lane and Patrick McGushin (Banking).
Richard Hayes said: “We were delighted to assist our clients on one of the largest TLB financings for an Australian borrower to date. It was an exciting cross-border deal which involved us bringing together experts from our banking, tax and stamp duty teams to structure, negotiate and document the deal in the most efficient manner. This deal is indicative of the growing popularity of the US TLB market to Australian borrowers which provides access to greater liquidity together with lighter covenants and longer loan tenors.”
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