01—Abstract
Summary
Summary of the 8-K filed August 6, 2025. Cited figures are marked; the original filing is the authoritative source.
On July 31, 2025, Packaging Corporation of America (PCA) entered into two new credit agreements with lenders, agents and other parties named therein: a Commercial Credit Agreement and a Farm Credit Agreement.
The Commercial Credit Agreement provides a $500 milliona three-year unsecured term loan facility and a $600 million unsecured revolving credit facility, while the Farm Credit Agreement provides a $500 million seven-year unsecured term loan facility. Borrowings under both agreements will be guaranteed by PCA's material subsidiaries. The term loan proceeds may be used only to complete the Greif Acquisition, and PCA expects to fully draw the term loan facilities at the closing of that acquisition.
The Commercial Credit Agreement replaces PCA's Old Credit Agreement with Mizuho Bank, Ltd., dated June 8, 2021 and amended April 27, 2023, which was terminated. The Old Credit Agreement would have expired on June 8, 2026. Apart from approximately $27.5 millionb of letters of credit, no borrowings were outstanding under the Old Credit Agreement, and no borrowings are currently outstanding under the new revolving facility.
The agreements contain customary affirmative and negative covenants, including limits on liens, mergers and consolidations, asset sales and subsidiary indebtedness, as well as a maximum consolidated leverage ratio. Loans bear interest at Term SOFR or the Base Rate plus an Applicable Margin, and PCA may prepay loans at any time without premium or penalty.
02—Key points
Key Highlights
- Two new unsecured credit agreements dated July 31, 2025: a Commercial Credit Agreement and a Farm Credit Agreement.
- Commercial Credit Agreement includes a $500 million three-year unsecured term loan and a $600 million unsecured revolving credit facility with a five-year term.
- Farm Credit Agreement provides a $500 million seven-year unsecured term loan facility and permits fixed-rate borrowing quoted by the agent.
- Term loan proceeds may only be used to complete the Greif Acquisition, and PCA expects to fully draw the term loans at closing.
- Old Credit Agreement with Mizuho Bank, Ltd. was terminated; it would have expired June 8, 2026, and had about $27.5 million of letters of credit outstanding with no borrowings.
- Applicable Margins are tied to PCA's Public Debt Rating and, for the revolver, its Gross Leverage Ratio; Term SOFR revolving loans range from 0.805% to 1.400% and Term SOFR term loans from 0.875% to 1.500% under the Commercial Credit Agreement.
- Borrowings are guaranteed by material subsidiaries, subject to a maximum consolidated leverage ratio, and can be prepaid without premium or penalty.
03—Questions
Frequently Asked Questions
What new financing did Packaging Corporation of America obtain?
On July 31, 2025, PCA entered into a Commercial Credit Agreement with a $500 million three-year unsecured term loan and a $600 million unsecured revolving credit facility, and a Farm Credit Agreement with a $500 million seven-year unsecured term loan.
What is the purpose of the term loans?
The proceeds of the term loans under the Credit Agreements may only be used to complete the Greif Acquisition. PCA expects to fully draw upon the term loan facilities at the closing of that acquisition.
What happened to PCA's existing credit agreement?
The Commercial Credit Agreement replaces the Old Credit Agreement with Mizuho Bank, Ltd., dated June 8, 2021 and amended April 27, 2023, which was terminated. The Old Credit Agreement would have expired June 8, 2026. Other than approximately $27.5 million of letters of credit, no borrowings were outstanding under it.
How is the interest rate on these loans determined?
Loans bear interest at the Term SOFR Rate or the Base Rate plus an Applicable Margin. Under the Commercial Credit Agreement, the revolver margin is based on PCA's Gross Leverage Ratio or Public Debt Rating, and the term loan margin is based on the Public Debt Rating. Under the Farm Credit Agreement, the margin is based on the Public Debt Rating.
Are there restrictions or prepayment terms attached to the loans?
The agreements contain customary covenants limiting liens, mergers and consolidations, asset sales and subsidiary indebtedness, along with events of default and a maximum leverage ratio calculated on a consolidated basis. PCA may prepay Base Rate or Term SOFR Rate loans at any time without premium or penalty.
04—Continue