Packaging Corp. of America (PKG) Tuesday completed an underwritten public offering of $400 million of 3.90 percent senior notes due 2022.
The company will redeem all of its existing $400 million of ten-year 5.75 percent senior notes due August 1, 2013 on July 26, 2012. The total cost to redeem the notes is expected to be about $432 million, including an estimated redemption premium of $21 million and accrued and unpaid interest through the redemption date of $11 million. The actual redemption premium will be calculated on July 23 in accordance with the terms of the redeemed notes. The company will fund the redemption with the proceeds received from the completed debt offering and cash on hand.
The company also paid $65.5 million to settle an interest rate protection agreement on the ten-year treasury rate, which the company entered into in August 2011, to protect against interest rate increases in connection with the anticipated refinancing of the 5.75 percent notes. In accordance with accounting rules, net payments of $56 million, from the settlement of interest rate protection agreements and refinancing fees and expenses, will be amortized as additional interest expense over the term of the new ten-year notes.
In connection with the debt offering and note redemption, the company expects to record a second quarter after-tax charge of $2 million or $0.02 per share and an estimated third quarter after-tax charge of $13 million or $0.14 per share.
For comments and feedback contact: editorial@rttnews.com
Business News
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.