Some packaging credits are trading up on the belief that they are wrapped in a recession-proof box. A piece of Graham Packaging's bank debt traded at 95 last week, up two points for the name. Gaylord Container Corp. traded at 95, up 1/4 of a point. "There's some attention on deals that are non-telecom. There's real asset valuation backing these companies," a dealer explained. "In a bad economy, you're still going to buy cereal or orange juice, but you may not buy a car." Buyers and sellers could not be ascertained. A tense market is said to be working in these credits' favor.
Graham Packaging has a $650 million deal that breaks down into five tranches. Pricing for the first three tranches is 21/4 % over LIBOR, while the remaining tranches are at LIBOR plus 23/4 %. Deutsche Bank and Bank of America are the lead arrangers. Gaylord Container has a $300 million deal that breaks down into two tranches and expires in 2003. Pricing is 35/8 % over LIBOR. Deutsche Bank, Bank of America and Bank of New York are the lead arrangers.