(Adds credit-default swap prices in third paragraph.)
June 3 (Bloomberg) -- Sealed Air Corp., the food-packaging maker that’s buying Diversey Holdings Inc., outlined $3.8 billion of financing committed by Citigroup Inc. and its affiliates to back the acquisition.
The financing package will include a $750 million five-year term loan A, a $1.55 billion seven-year term loan B and a $1.5 billion one-year senior unsecured bridge loan, the Elmwood Park, New Jersey-based company said today in a regulatory filing.
The cost to protect Sealed Air’s debt from default for five years rose to the highest level since March 2009. Credit-default swaps on the company’s debt added 26.6 basis points to 276.7 basis points as of 10:40 a.m. in New York, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
Credit-default swaps, which typically fall as investor confidence improves and rise as it deteriorates, pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
Sealed Air, the maker of Cryovac food packaging and Bubble Wrap, agreed to pay Diversey shareholders $2.1 billion in cash and 31.7 million shares of Sealed Air stock. The purchase also includes $1.4 billion of net debt to be refinanced, for a total cost of $4.3 billion.
A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks.
--Editors: Chapin Wright, Sharon L. Lynch
To contact the reporter on this story: Richard Bravo in New York at email@example.com.
To contact the editor responsible for this story: Faris Khan at firstname.lastname@example.org.