Abitibi expected to price $415 million three-year bullets in 13% area

By Paul A. Harris and Sara Rosenberg

St. Louis, March 13 - AbitibiBowater Inc. expects to price $415 million of three-year non-callable senior secured notes in the 13% area, according to a buyside source familiar with the deal.

Goldman Sachs & Co., which is leading Abitibi's $1.583 billion debt refinancing package, will be the bookrunner.

Timing on the bond deal remains to be determined.

Meanwhile the company held a bank meeting on Thursday morning to kick off syndication on its $450 million 364-day senior secured term loan.

Other funding for the refinancing will come from $300 million of convertible notes and $256.8 million of exchange senior notes - assuming 90% participation in an exchange offer for near-term maturity notes.

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

As part of the transaction, the company is seeking an amendment to the existing Bowater Inc. revolver to allow for, among other things, the potential issuance of new AbitibiBowater equity-linked securities and a delay or modification to Bowater's planned separation of its Catawba, S.C., coated paper facility.

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

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