Clearwater Paper extends loan, tweaking interest rate margins

By Toni Weeks

San Diego, Sept. 30 - Clearwater Paper Corp. amended its loan and security agreement on Sept. 28, extending the term of the revolving loan to the earlier of Sept. 30, 2016 or 90 days prior to the maturity date of the company's 10 5/8% notes due June 15, 2015, according to an 8-K filed Friday with the Securities and Exchange Commission.

The amendment also increased permitted capital expenditure limits to $180 million during the 2011 fiscal year, $180 million during the 2012 fiscal year and $60 million in each fiscal year after that. In addition to the permitted capital expenditures, another $30 million will be permitted in connection with Clearwater's expansion of its pulp-making capacity in its Cypress Bend, Ark., manufacturing facility.

In addition, the amendment changed interest rate margins based on Clearwater's fixed-charge coverage ratio. For a fixed-charge coverage ratio of greater than or equal to 1.50 to 1.00, the interest rate will be Libor plus 175 basis points. If the fixed-charge coverage ratio is less than 1.50 to 1.00 but greater than or equal to 1.25 to 1.00, the margin is increased to 200 bps. If the fixed-charge coverage ratio is less than 1.25 to 1.00, the margin increases again to 225 bps.

Bank of America, NA is the administrative agent and a lender. Wells Fargo Capital Finance, LLC is also a lender.

Clearwater is a Spokane, Wash.-based manufacturer of consumer tissue, bleached paperboard and wood products.

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