Rexam to launch 350mln stg rights issue - paper

LONDON, July 26 (Reuters) - Drinks can maker Rexam (REX.L), saddled with net debt of 2.7 billion pounds ($4.5 billion), is to launch a 350 million pound rights issue in an attempt to preserve its investment grade credit rating, a media report said on Sunday.

It is likely to be asked to confirm the cash call in a statement to the stock exchange on Monday, with the cash call expected to come on Thursday, when the company announces its first-half results, the Sunday Telegraph reported.

Citigroup and RBS Hoare Govett, the investment banks, have been appointed to underwrite the fundraising, the paper said.

In February, the rating agency Standard & Poor's lowered its long-term corporate credit and senior unsecured debt ratings on Rexam from BBB to BBB-. Its A-3 short-term rating was affirmed.

The paper cited market sources as saying the company was making the cash call to "eliminate any risk that the company's rating may be cut further".

Rexam, whose plastic packaging is also used in healthcare and personal care products, said in May that it has been incurring higher interest rates and net finance costs, but remained well within its covenant limits.

Refinancing of its 775 million pound credit facility was set to be completed in the first half.

Rexam was not immediately available for comment. (Reporting by Avril Ormsby; Editing by Dominic Evans)