Georgia-Pacific rises; LCDX up with stocks, cash steady; U.S. Silica gets ready to close filled-out deal

By Sara Rosenberg

New York, Nov. 24 - Georgia-Pacific Corp.'s term loan B headed higher on Monday and saw a decent amount of volume as some buyers stepped in for the name, LCDX 10 gained ground in sympathy with equities and the cash market overall was basically unchanged as trading was relatively light.

In other news, U.S. Silica Co.'s term loan A is expected to close later this week and pricing, as was previously anticipated, did end up holding at initial levels.

Georgia-Pacific nabs some attention

Georgia-Pacific's term loan B seemed to catch the eye of some investors on Monday as there was some opportunistic buying in the secondary, pushing levels a little higher, according to a trader.

The term loan B was quoted at 76 bid, 78 offered, up from Friday's levels of 75 bid, 77 offered, the trader said.

"Pretty liquid name. Been getting beaten up over the last few days. People stepping in and buying. Think things have stabilized a little bit and it might be a good price to get it for. Name most people like," the trader remarked.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

LCDX better, cash unchanged

LCDX 10 was stronger during the trading session as stocks rallied, while the cash market was mostly unchanged with light volume, according to traders.

The index was quoted at 77.25 bid, 77.75 offered, up from Friday's closing levels of around 76 bid, 77 offered, one trader said.

As for cash, traders mostly labeled it as unchanged, although one trader said that it might be slightly better, but hard to tell because there was so little activity, and another trader said that it might be slightly weaker.

"Things felt a little better in the morning, but then faded in the afternoon. No real reason. Equities were up 5%," the second trader added.

Nasdaq closed up 87.67 points, or 6.33%, Dow Jones Industrial Average closed up 396.97 points, or 4.93%, S&P 500 closed up 51.78 points, or 6.47%, and NYSE closed up 353.74 points, or 7.13%.

U.S. Silica to close soon

Over in the primary market, U.S. Silica's $102 million seven-year term loan A is expected to close before the Thanksgiving holiday and the deal is fully subscribed by 12 accounts, according to a market source.

The term loan A is priced at Libor plus 550 basis points with a 3.25% Libor floor and an original issue discount of 97 - in line with initial talk, which is no surprise given that the deal was pretty much fully subscribed at this level last week already.

The only change that had been made to the loan during the syndication process was a downsizing by $43 million from $145 million.

BNP Paribas is the lead bank on the deal that will be used to help fund the buyout of the company by Golden Gate Capital and Preferred Unlimited.

The lost term loan funds was made up through a variety of ways, such as the equity financing for the deal was increased by roughly $12 million, the mezzanine financing for the deal was increased to $80 million from $74 million, the purchase price for the company was reduced and some customer contracts are helping to make up the difference as well.

More U.S. Silica loan details

Amortization on the U.S. Silica loan is 2% in the first two years, 11% in year three, 12% in year four, 15% in years five and six, and the remainder in year seven.

Covenants include total leverage, minimum interest coverage and minimum fixed-charge coverage.

The term loan A was marketed to a combination of banks and institutional investors. There was no pre-marketing stage for this term loan and the company did not have an existing lender base. U.S. Silica did get a credit facility about a year and a half ago, but that debt was already taken out.

However, the company does have an existing $35 million ABL revolver that is going to remain in place following completion of the new term loan.

Senior leverage is 2.1 times and leverage through the mezzanine debt is 3.75 times. Prior to the term loan A downsizing, senior leverage was 3.0 times and total leverage was 4.5 times.

U.S. Silica is a Berkeley Springs, W.Va.-based producer of ground and unground silica sand, kaolin clay, aplite and related industrial minerals.

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