Moody's places PCA's Baa3 senior unsecured rating under review for possible downgrade; review will focus on amount of acquisition debt financing taken on to fund acquisition of Boise

TORONTO , September 18, 2013 (press release) – Moody's Investors Service placed the Baa3 senior unsecured rating of Packaging Corporation of America (PCA) under review for possible downgrade. The review has been precipitated by the company's announcement that it has signed a definitive agreement to acquire all of the common shares of Boise Inc (including Ba2 rated indirect wholly owned subsidiary Boise Paper Holdings, L.L.C. (Boise Paper)). Boise Paper is a North American producer of linerboard, corrugated containers, and paper products.

On Review for Possible Downgrade:

..Issuer: Packaging Corporation of America

....Senior Unsecured Regular Bond/Debenture Jun 15, 2022, Placed on Review for Possible Downgrade, currently Baa3

....Senior Unsecured Regular Bond/Debenture Mar 15, 2018, Placed on Review for Possible Downgrade, currently Baa3

....Senior Unsecured Shelf Jun 20, 2015, Placed on Review for Possible Downgrade, currently (P)Baa3

Outlook Actions:

..Issuer: Packaging Corporation of America

....Outlook, Changed To Rating Under Review From Stable

RATINGS RATIONALE

Moody's review will focus on the amount of acquisition debt financing taken on to fund the transaction; the ability of the combined company to de-lever through free cash flow generation; the size and pace of cost synergies that can be realized; post-closing credit metrics; the integration of Boise's paper business (which is in secular decline); and PCA's ability to maintain strong liquidity.

PCA has entered into a definitive agreement to acquire all of the outstanding common shares of Boise Inc. for $12.55 per share in cash, for an aggregate transaction value of almost $2 billion, inclusive of $714 million of outstanding net indebtedness. PCA plans to purchase the common shares and refinance Boise Inc's debt with a $2 billion dollar bank and bond debt offering. PCA has committed bridge financing in place. The acquisition is expected to close by the end of the year and is subject to regulatory clearances and other customary closing conditions.

The principal methodology used in this rating was the Global Paper and Forest Products Industry Methodology published in September 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

PCA is fourth largest manufacturer of corrugated packaging materials in the US, and is headquartered in Lake Forest, Illinois.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

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