Ranpak Holdings Corp. Announces Completion of Refinancing Transaction

Rhea-AI Summary

Ranpak Holdings Corp. (NYSE: PACK) has completed its previously announced refinancing of existing senior secured credit facilities. The company entered into a new First Lien Credit Agreement with UBS AG and other lending institutions, featuring:

- A $410 million U.S. dollar-denominated first lien term facility maturing in December 2031
- A $50 million revolving facility available in U.S. dollars and Euros maturing in December 2029
- Term Facility amortization rate of 1.00% per annum
- Interest rates for Term Facility: SOFR plus 4.50% or base rate plus 3.50%, with potential step-downs based on leverage ratio
- Interest rates for Revolving Facility: SOFR/eurocurrency rate plus 4.00% or base rate plus 3.00%, with potential step-downs

Positive

• Successfully completed refinancing of existing credit facilities
• Secured substantial $410M term facility with extended maturity until 2031
• Additional $50M revolving facility providing financial flexibility
• Step-down provisions in interest rates based on leverage ratio performance

Negative

• High interest rates starting at SOFR + 4.50% for Term Facility
• Increased debt load with $410M term facility

Insights

Financial Analyst

<p>The completion of this refinancing transaction represents a strategic move to optimize PACK's capital structure. The new <money>$410 million</money> term facility and <money>$50 million</money> revolving facility provide enhanced financial flexibility with extended maturities to 2031 and 2029, respectively. The pricing terms, while reflecting current market conditions, include performance-based step-downs that could reduce interest costs as the company's leverage metrics improve.</p><p>The 1% annual amortization rate on the term facility is notably favorable, minimizing near-term principal payment obligations. The interest rate structure, starting at SOFR + <percent>4.50%</percent> for the term facility with potential step-downs to SOFR + <percent>4.25%</percent>, provides a clear path for reducing borrowing costs through improved financial performance. The undrawn revolving facility maintains liquidity headroom for operational flexibility.</p><p>For a company with a market cap of <money>$593.6 million</money>, this refinancing addresses near-term debt maturities and establishes a more sustainable capital structure. The involvement of major financial institutions as joint lead arrangers signals strong institutional confidence in PACK's business model and future prospects.</p>

Credit Risk Analyst

<p>The refinancing materially improves PACK's debt maturity profile by extending terms well into the next decade. The new facilities incorporate modern market terms with SOFR-based pricing, replacing older LIBOR-based structures. The stepped pricing mechanism incentivizes deleveraging, with potential interest savings of 25-75 basis points based on leverage ratio achievements.</p><p>The minimal amortization schedule of <percent>1%</percent> annually preserves cash flow for operational needs and growth initiatives. The <money>$50 million</money> revolving facility provides a liquidity cushion and its current undrawn status maintains full availability for future working capital needs or strategic opportunities.</p><p>The participation of multiple tier-one financial institutions in the syndicate reflects positively on the credit quality assessment. This refinancing effectively addresses refinancing risk and provides a stable long-term capital structure, though investors should monitor leverage metrics for potential interest rate step-downs.</p>

CONCORD TOWNSHIP, Ohio--(BUSINESS WIRE)-- Ranpak Holdings Corp. (NYSE: PACK) (“Ranpak” or “the Company”), a leading provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-Commerce and industrial supply chains, today reported that it has completed the previously announced refinancing of the existing senior secured credit facilities of Ranger Pledgor LLC, (“Holdings”), Ranpak Corp., (the “U.S. Borrower”) and Ranpak B.V. (the “Dutch Borrower” and together with the U.S. Borrower, the “Borrowers”). In connection with the closing, the Borrowers entered into a new First Lien Credit Agreement (the “Credit Agreement”) by and among Holdings, the Borrowers, the lending institutions party thereto and UBS AG, Stamford Branch, as Administrative Agent. UBS Securities LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc. and Wells Fargo Securities, LLC acted as joint lead arrangers and joint bookrunners for the New Credit Facilities described below.

The Credit Agreement provides for a $410 million U.S. dollar-denominated first lien term facility maturing in December 2031 (the “Term Facility”) and a $50 million revolving facility available in U.S. dollars and Euros maturing in December 2029 (the “Revolving Facility”, and together with the Term Facility, the “New Credit Facilities”). The amortization rate for the Term Facility is 1.00% per annum. The Term Facility accrues interest, at the Borrowers’ option, at either (i) the secured overnight financing rate (“SOFR”) plus 4.50% or (ii) the base rate plus 3.50%, in either case subject to a step-down to 4.25% for SOFR borrowings and 3.25% for base rate borrowings, respectively, based on the first lien net leverage ratio level. The Revolving Facility accrues interest, at the Borrower’s option, at either (i) SOFR or the applicable eurocurrency rate plus 4.00% or (ii) the base rate plus 3.00%, in either case subject to step-downs to 3.25% for SOFR or eurocurrency borrowings and 2.25% for base rate borrowings, respectively, based on first lien net leverage ratio levels. As of December 19, 2024, no amounts under the Revolving Facility have been drawn.

Proceeds of the New Credit Facilities were used in part to consummate the refinancing of the existing credit facilities and pay all fees, premiums, expenses and other transaction costs incurred in connection therewith at the closing of the New Credit Facilities.

About Ranpak:
Founded in 1972, Ranpak's goal was to create the first environmentally responsible system to protect products during shipment. The development and improvement of materials, systems and total solution concepts have earned Ranpak a reputation as an innovative leader in e-commerce and industrial supply chain solutions. Ranpak is headquartered in Concord Township, Ohio and has approximately 850 employees. Additional information about Ranpak can be found on its website: https://www.ranpak.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241219233321/en/

Contact for Investors:

ir@ranpak.com

Source: Ranpak Holdings Corp.

FAQ

What are the key terms of Ranpak's (PACK) new credit facilities in December 2023?

Ranpak's new credit facilities include a $410M term facility maturing in 2031 and a $50M revolving facility maturing in 2029. The term facility has a 1% annual amortization rate with interest rates at SOFR plus 4.50% or base rate plus 3.50%, subject to step-downs based on leverage ratio.

When does Ranpak's (PACK) new term facility mature?

Ranpak's new term facility matures in December 2031.

What is the interest rate structure for Ranpak's (PACK) new credit facilities?

The Term Facility accrues interest at either SOFR plus 4.50% or base rate plus 3.50%, while the Revolving Facility accrues at SOFR/eurocurrency rate plus 4.00% or base rate plus 3.00%, both with potential step-downs based on leverage ratios.

How much is Ranpak's (PACK) new revolving credit facility and when does it mature?

Ranpak's new revolving credit facility is $50 million, available in U.S. dollars and Euros, and matures in December 2029.