Graphic Packaging widens OID; Abitibi firms terms, breaks; CB Richard frees to trade; LCDX dips

By Sara Rosenberg

New York, March 26 - Graphic Packaging International, Inc. increased the original issue discount on its in-market incremental term loan in an attempt to attract more investors to the deal.

In other news, Abitibi-Consolidated Inc. finalized the original issue discount and Libor floor on its downsized term loan, and then freed the deal up for trading.

Also breaking for trading during Wednesday's market hours was CB Richard Ellis Group Inc.'s term loan, with levels on the deal quoted right around the original issue discount price, and LCDX 9 was weaker in trading in sympathy with equities.

Graphic Packaging revised the original issue discount on its $1.2 billion senior secured term loan due May 16, 2014 (Ba3), according to a market source.

Under the change, the term loan is now being offered to investors at a discount of 91 as opposed to at 93, the source said.

Pricing on the loan was left unchanged at Libor plus 275 basis points.

The deal is still being worked through, even though the book was previously scheduled to close this past Tuesday, the source remarked.

"I think 91 is a decent level. Probably will get it done there," a buy-side source added.

Amortization is an annual amount of 1%, payable in equal semiannual installments, with a final installment due and payable at maturity equal to the remaining outstanding principal balance.

Bank of America, JPMorgan, Goldman Sachs and Deutsche Bank are the lead banks on the deal that was funded earlier this month.

Proceeds were used to refinance existing first- and second-lien bank debt in connection with the company's combination with Altivity Packaging LLC.

As part of the transaction, the company also got a $100 million add-on to its revolving credit facility due May 16, 2013, bringing the new total size to $400 million.

Graphic Packaging's existing $1.055 billion term loan due May 16, 2014 remained in place and continues to be priced at Libor plus 200 bps.

The combination of Graphic Packaging and Altivity created a company with pro-forma 2007 revenues of over $4.4 billion and pro-forma 2007 adjusted EBITDA of about $553 million.

Graphic Packaging is a Marietta, Ga., paperboard packaging company.

Abitibi finalizes structure, frees to trade

Abitibi-Consolidated came out with final details on its downsized 364-day senior secured term loan (B1), allocated and broke the deal for trading above its original issue discount price, according to a market source.

The $400 million term loan, down from $450 million, is priced at Libor plus 800 bps, with a 3.5% Libor floor and an original issue discount of 96.

The original issue discount was being guided in the 96-97 area, after being changed from initial talk of 97, and then it firmed at the wide end of that revised guidance on Wednesday, the source said.

In addition, the Libor floor was originally guided in the 3% to 3.5% area, was then heard to be 3%, and then firmed at the high end of the initial talk.

Also, earlier this week, pricing on the term loan was flexed up from original talk at launch of Libor plus 700 bps.

Following the finalization of terms on Wednesday, the loan hit the secondary market, with levels quoted at 97¼ bid, 97¾ offered on the break and then moving up to 97½ bid, 98 offered, the source added.

Goldman Sachs is the lead bank on the deal that will be used to help refinance existing debt, including the company's 6.95% notes, 5¼% notes, 7 7/8% notes, and credit facilities A and B.

Other funding for the refinancing will come from $413 million of three-year 13¾% senior secured notes, $350 million of convertible notes and $267 million of exchange senior notes - assuming only the amount of notes necessary to satisfy the minimum tender condition are exchanged in the exchange offer.

The private placement of convertible notes was originally expected by the company to be sized at $300 million.

The company also plans on closing the sale of its Snowflake, Ariz., mill in mid-April. The sale is expected to generate proceeds of $161 million, of which a portion will be used to repay some term loan debt.

Abitibi is a Montreal-based producer of newsprint and commercial printing papers, market pulp and wood products.

CB Richard breaks

CB Richard Ellis's $300 million term loan A-1 (Ba1/BB+) due Dec. 20, 2013 freed up for trading on Wednesday as well, with levels quoted at 99½ bid, par offered, according to a trader.

The term loan A-1 is priced at Libor plus 350 bps and was sold to investors at an original issue discount of 991/2.

The debt is being obtained under the accordion feature in the company's existing credit agreement.

Financial covenants include maximum net leverage ratio of 3.75 times and minimum interest coverage ratio of 2.25 times.

Amortization is $45 million in year two, $60 million in years three, four and five, and $75 million in year six.

Credit Suisse is the lead bank on the deal that will be used to fund working capital needs and for general corporate purposes.

Pro forma for the transaction for the trailing 12 months ended Dec. 31, net debt to normalized EBITDA is 1.8 times.

Closing is targeted for March 27.

CB Richard is a Los Angeles-based commercial real estate services company.

LCDX slides with stocks

LCDX 9 was a bit softer during the trading session as it fell with the stock market, according to a trader.

The index was quoted at 93.50 bid, 93.70 offered, down from 93.80 bid, 94 offered, the trader said.

Nasdaq closed down 16.69 points, or 0.71%, Dow Jones Industrial Average closed down 109.74 points, or 0.88%, S&P 500 closed down 11.86 points, or 0.88%, and NYSE closed down 54.68 points, or 0.61%.

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