By Paul A. Harris
St. Louis, Aug. 2 - Domtar Inc. priced a $400 million issue of 7 1/8% 10-year senior notes (Ba2/BB+) at 99.904 to yield 7.138% in a quick-to-market Tuesday transaction, according to a syndicate source.
The transaction priced at a 280 basis point spread to Treasuries, on the tight end of the 280 to 285 bps price talk.
Citigroup and JP Morgan ran the books.
The co-managers were Royal Bank of Canada, National Bank of Canada, Bank of Nova Scotia, TD Securities, CIBC World Markets, BMO, Banc of America Securities LLC, Caisee Centrale, Deutsche Bank Securities, Morgan Stanley, UBS Investment Bank, BNP Paribas and Rabobank.
Proceeds will be used to redeem the company's 8¾% notes due August 2006 and repay its revolving credit facility.
The issuer is a Montreal, Quebec, paper and packaging company.
| Issuer: | Domtar Inc.
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| Amount: | $400 million
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| Maturity: | Aug. 15, 2015
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| Security description: | Senior notes
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| Bookrunners: | Citigroup, JP Morgan
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| Coupon: | 7 1/8%
|
| Price: | 99.904
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| Yield: | 7.138%
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| Spread: | 280 basis points
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| Call protection: | Make-whole call at Treasuries plus 50 basis points
|
| Trade date: | Aug. 2
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| Settlement date: | Aug. 5
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB+
|
| Price talk: | 280-285 basis points spread to Treasuries
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