Domtar readies launch of $775 million of term loans for Tuesday

By Sara Rosenberg

New York, Sept. 20 – Domtar Corp. will hold a lender call at 11 a.m. ET on Tuesday to launch $775 million of senior secured term loans, according to a market source.

Barclays, BMO Capital Markets, Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are the bookrunners on the deal. Barclays is the administrative agent.

The debt consists of a $525 million seven-year term loan B and a $250 million delayed-draw term loan B, the source said.

The term loan debt has 101 soft call protection for six months.

Proceeds will be used with senior secured notes to fund the acquisition of the company by Paper Excellence BV for $55.50 per share and finance the potential redemption of Domtar’s existing senior unsecured notes.

The delayed-draw term loan is available for 90 days and only to fund redemptions of the senior unsecured notes through a change-of-control offer.

Closing is expected this year, subject to customary conditions.

After the transaction closes, Paper Excellence intends to continue the operations of Domtar as a stand-alone business entity.

Domtar is a Fort Mill, S.C.-based provider of fiber-based products, including communication, specialty and packaging papers, market pulp and airlaid nonwovens. Paper Excellence is a British Columbia-based diversified manufacturer of pulp and specialty, printing, writing and packaging papers.

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