Moody's rates Reynolds notes Caa2

Moody's Investors Service said it assigned a Caa2 (LGD5, 79%) rating to the $650 million of senior notes due 2016 to be issued by Beverage Packaging Holdings (Luxembourg) II SA and Beverage Packaging Holdings II Issuer Inc. (USA) and affirmed Reynolds Group Holdings Ltd.'s B3 corporate family rating, B3-PD probability of default rating and B1 (LGD2, 25%) senior secured credit facilities. The outlook is stable.

The agency also affirmed Beverage Packaging Holdings (Luxembourg) II's €480 million 8% senior notes due 2016 at Caa2 (LGD5, 79%) and senior subordinated notes at Caa2 (LGD6, 96%) and Pactiv Corp.'s senior notes at Caa2 (LGD6, 93%).

The proceeds of the new notes will be used to refinance the existing €480 million 8% senior notes due 2016.

The agency said the B3 corporate family rating reflects Reynolds' weak credit metrics, concentration of sales within certain segments and acquisitiveness/financial aggressiveness.

Strengths in the company's profile include its strong brands and market positions in certain segments, scale and high percentage of blue-chip customers, Moody's said.

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