Domtar ups spread on $775 million of term loans to Libor plus 550 bps

By Sara Rosenberg

New York, Oct. 1 – Domtar Corp. increased pricing on its $525 million seven-year term loan B and $250 million delayed-draw term loan B to Libor plus 550 basis points from talk in the range of Libor plus 500 bps to 525 bps, according to a market source.

Also, the 101 soft call protection on the term loan was extended to one year from six months, and amortization was revised to 1% for fiscal year 2022 and 5% thereafter from 1% per annum, the source said.

The term loan debt still has a 0.75% Libor floor and an original issue discount of 99.

Ticking fees on the delayed-draw term loan are half the margin from days 31 to 60 and the full margin thereafter.

Barclays, BMO Capital Markets, Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are the bookrunners on the $775 million of senior secured term loans (Ba2/BB+/BB+). Barclays is the administrative agent.

Final commitments were scheduled to be due at noon ET on Friday, the source added.

Proceeds will be used with $775 million of 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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.