Polyethylene resin producers are implementing a 5th price increase to the market on all grades of polyethylene effective December 1st, 2020. The polyethylene supply chain has had additional production disruptions with unplanned shutdowns in Texas and Mexico. These outages have tightened an already stressed supply chain for raw material as demand for PE products continues to remain strong. Consistent with this market change, effective with orders placed on or after February 6th, 2021 for immediate shipment (normal lead times), Heritage Bag will increase stock pricing on all can liner and food bag products by 6%. Non-guaranteed contracts will also be raised 6% on that date. We are unable to extend additional price protection or accept loading orders in advance of the price increase.
Sonoco (NYSE: SON), one of the largest global diversified packaging companies, today announced it has entered into a new five-year $750 million revolving credit facility (the “Credit Agreement”) with a syndicate of banks. The Credit Agreement replaces an existing credit facility entered into on July 20, 2017, and reflects substantially the same terms and conditions.
“We are pleased to upsize our prior $500 million committed credit facility with a new $750 million revolver and extend the maturity date for an additional five years. This new credit facility provides us with additional financial flexibility and reflects our strong credit profile. It also illustrates the solid relationships with our commercial banks,” said Julie Albrecht, Sonoco Vice President and Chief Financial Officer.
Consistent with prior facilities, the new revolving credit facility will support Sonoco’s $500 million commercial paper program. Based on the pricing grid in the Credit Agreement and Sonoco’s current credit ratings, a London Interbank Offered Rate (LIBOR) borrowing has an all-in drawn margin of 125.0 basis points.
The joint lead arrangers under the Credit Agreement are: BofA Securities, Inc.; Wells Fargo Securities, LLC; JPMorgan Chase Bank, N.A.; U.S. Bank National Association and TD Securities (USA) LLC. Bank of America, N.A. is the administrative agent and Wells Fargo Bank, National Association, JPMorgan Chase Bank, N.A., U.S. Bank National Association, and TD Bank, N.A. are co-syndication agents. MUFG Bank, Ltd. is the documentation agent.