UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
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Securities registered pursuant to Section 12(b) of the Exchange Act:
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Trading |
Name of each exchange on which registered | ||
| Item 1.01. | Entry into a Material Definitive Agreement. |
On July 31, 2025, Packaging Corporation of America (“PCA”) entered into two credit agreements (the first credit agreement being the “Commercial Credit Agreement” and the second credit agreement being the “Farm Credit Agreement” and collectively, the “Credit Agreements”) with the lenders, agents and other parties named therein. The Credit Agreements are filed herewith as Exhibits 10.1 and 10.2, which are incorporated by reference herein. The descriptions below do not purport to be complete and are qualified in their entirety by reference to the full text of the Credit Agreements. Capitalized terms not otherwise defined have the meanings given to them in the applicable Credit Agreement, as the context shall require.
The Commercial Credit Agreement includes a $500 million three-year unsecured term loan facility and a $600 million unsecured revolving credit facility. Loans bear interest at the Term SOFR Rate or the Base Rate plus the Applicable Margin, which, under the Commercial Credit Agreement, is determined based upon: (i) in the case of the revolving credit facility, PCA’s Gross Leverage Ratio or Public Debt Rating; and (ii) in the case of the term loan facility, PCA’s Public Debt Rating. The Applicable Margin will range from (w) 0.000% to 0.400% in the case of Base Rate revolving loans; (x) 0.805% to 1.400% in the case of Term SOFR Rate revolving loans; (y) 0.000% to 0.500% in the case of Base Rate term loans; and (z) 0.875% to 1.500% in the case of Term SOFR Rate term loans.
The Farm Credit Agreement is a $500 million seven-year unsecured term loan facility. Loans bear interest at the Term SOFR Rate or the Base Rate plus the Applicable Margin, which is determined based upon PCA’s Public Debt Rating and ranges from (i) 0.850% to 1.350% in the case of Base Rate loans; and (ii) 1.850% to 2.350% in the case of Term SOFR Rate loans. The Farm Credit Agreement also permits PCA to borrow at a fixed rate quoted by the Agent.
Revolving loans under the Commercial Credit Agreement have a five-year term and are available for borrowings for working capital and general corporate purposes. The proceeds of the term loans under the Credit Agreements may only be used to complete the Greif Acquisition and we expect to fully draw upon the term loan facilities under the Credit Agreements at the time of the closing of the Greif Acquisition.
The Commercial Credit Agreement replaces PCA’s old Credit Agreement, dated June 8, 2021 and amended on April 27, 2023 by and between PCA and Mizuho Bank, Ltd. (the “Old Credit Agreement”), which was terminated. The Old Credit Agreement would have expired on June 8, 2026. Except for approximately $27.5 million of letters of credit, (i) no borrowings were outstanding under the Old Credit Agreement and (ii) no borrowings are outstanding under the revolving credit facility included in the Commercial Credit Agreement.
Borrowings under the Credit Agreements will be guaranteed by PCA’s material subsidiaries.
The Credit Agreements contain customary affirmative and negative covenants, including limitations on liens, mergers and consolidations, sales of assets and subsidiary indebtedness, and events of default. PCA is subject to a maximum leverage ratio as calculated on a consolidated basis.
PCA may prepay Base Rate or Term SOFR Rate loans under the Credit Agreements at any time without premium or penalty.
| Item 1.02. | Termination of a Material Definitive Agreement. |
The disclosure under Item 1.01 regarding the termination of the Old Credit Agreement is incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The disclosure under Item 1.01 is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 10.1 | ||
| 10.2 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PACKAGING CORPORATION OF AMERICA | ||
| By: | /s/ Kent A. Pflederer | |
| Executive Vice President and Chief Financial Officer | ||
Date: August 6, 2025