AbitibiBowater refinancing plan may include convertibles offering

By Rebecca Melvin

New York, March 7 - AbitibiBowater Inc. said Friday that it may price between $200 million to $300 million of new equity or equity-linked securities as part of a larger refinancing, according to a release.

The securities would be part of a plan to refinance $1.4 billion to address upcoming debt maturities and general liquidity requirements of its Abitibi-Consolidated Inc. subsidiary.

No timing talk or other details were heard in the market, according to several convertibles syndicate sources.

But AbitibiBowater subsidiary, Abitibi-Consolidated, intends to commence an exchange offer targeting approximately $500 million of its near term maturities promptly, according to the release.

Concurrently with the equity or equity-linked offering, AbitibiBowater plans to price $200 million to $300 million of new senior unsecured exchange notes of Abitibi- Consolidated Inc. due 2010; $400 million to $500 million of new 364-day senior secured term loan of Abitibi-Consolidated Inc. secured by working capital and other assets; and about $400 million of new senior secured notes or a term loan due 2011 of Abitibi-Consolidated Inc. secured by fixed assets.

AbitibiBowater was formed from the merger of Montreal-based Abitibi-Consolidated Inc. and Greenville, S.C.-based Bowater Inc.

The new financings and exchange notes are aimed at retiring the 6.95% notes of Abitibi-Consolidated due April 1; the 5.25% notes of Abitibi-Consolidated Co. of Canada due June 20; and the 7.875% notes of Abitibi-Consolidated due Aug. 1, 2009.

Under the terms of the exchange offer, holders will be offered a combination of cash and new senior unsecured exchange notes of Abitibi-Consolidated due 2010. As part of the transaction, some credit facilities of Abitibi-Consolidated and its subsidiaries are expected to be refinanced.

With respect to the proposed 364-day term loan, Abitibi-Consolidated will commence the marketing of the new loan and will be meeting with potential lenders in New York City this coming week.

As part of its refinancing plan, AbitibiBowater will be seeking an amendment to the existing revolving credit facility of its Bowater Inc. subsidiary to allow for, among other things, the potential issuance of new equity-linked securities of AbitibiBowater and a delay or modification to Bowater's planned separation of its Catawba, S.C. coated-paper facility. AbitibiBowater no longer expects its Bowater subsidiary to pursue a secured debt financing against the Catawba facility.

The sale of Abitibi-Consolidated's Snowflake, Arizona mill, originally announced in February, is currently expected to close in mid-April. The sale is expected to result in $161 million of cash proceeds, or a little less than one-third of its previously announced $500 million target in asset sales.

© 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.