NewPage firms OID; Royalty Pharma floats talk; General Motors inches lower; LCDX up

By Sara Rosenberg

New York, Dec. 5 - NewPage Corp. finalized the original issue discount on its term loan, and the tranche is already oversubscribed after launching to retail investors just one day ago. Royalty Pharma started circulating price talk on its term loan B add-on as the debt is getting ready to launch with a bank meeting on Thursday.

Meanwhile, in trading news, General Motors Corp. saw its term loan come in just a touch as the company has not had a very positive news week, and LCDX headed higher.

NewPage firmed up the original issue discount on its $1.6 billion term loan that is due in 2014 as the books on the oversubscribed deal, which just launched to retail investors on Tuesday, are getting ready to close on Thursday, according to a market source.

The term loan discount is set at 97, the tight end of original guidance that was in the 96 to 97 area, the source said.

Pricing on the term loan is Libor plus 375 basis points.

The term loan had been rumored to be attracting market attention prior to the launch as a result of the bridge being syndicated. In fact, back in October, it was heard that the loan was subscribed at pricing of Libor plus 375 bps and a discount of 99 - although that was not the official talk on the deal.

NewPage's $2.1 billion credit facility also includes a $500 million ABL revolver that is due in 2012 and is priced at Libor plus 200 bps.

Goldman Sachs is the lead bank on the deal.

Proceeds from the credit facility, along with a $456 million add-on to the company's 10% second-lien senior secured notes due 2012, will be used to refinance existing bank debt and to help fund the acquisition of Stora Enso North America, a paper manufacturing business, from Stora Enso Oyj.

NewPage is buying Stora Enso North America for $1.5 billion in cash, a $200 million super holdco PIK note that NewPage will issue to Stora Enso and a 19.9% equity interest in the combined company.

Pro forma for the 12 months ended Sept. 30, the ratio of total debt to consolidated adjusted EBITDA is 6.0 times and the ratio of consolidated adjusted EBITDA to cash interest expense is 1.7 times.

NewPage is a Miamisburg, Ohio, producer of coated papers.

Royalty Pharma price talk

Guidance on Royalty Pharma's $700 million term loan B add-on (BBB-) began making its way around the market as the deal is gearing up to kick off syndication with a bank meeting at 2 p.m. ET on Thursday, according to a market source.

The incremental term loan B is expected to be launched to investors with talk of Libor plus 200 bps to Libor plus 225 bps, the source said.

In connection with the add-on, Royalty Pharma will have to amend its existing credit facility to allow for the new debt and the company plans to increase pricing on its existing term loan B, sources previously told Prospect News.

The existing term loan B is currently priced at Libor plus 150 bps.

Bank of America is the lead bank on the deal, which will be used for acquisition financing.

Royalty Pharma is a New York-based acquirer of revenue-producing intellectual property, principally royalty interests in marketed and late-stage biopharmaceutical products.

GM term loan slips

Moving to the secondary market, General Motors' term loan came in a little bit more on Wednesday as investors continued to react to negative November numbers and news of halted production, according to a trader.

The term loan opened in the morning at 92¾ bid, 93¾ offered and then rebounded to 93 1/8 bid, 93 5/8 offered, where it closed out the day, the trader said. By comparison, on Tuesday, the loan went out at 93 3/8 bid, 93 7/8 offered, the trader added.

On Monday, General Motors announced that its November sales were 263,654 vehicles, down 11% compared to last year, reflecting continuing reductions in daily rental sales and softening industry demand.

Then on Tuesday, news emerged that, starting at the end of this month, the company will halt production for two weeks at three of its plants in order to manage inventory levels.

General Motors is a Detroit-based developer, producer and marketer of cars, trucks and parts.

LCDX gains ground

LCDX 9 was stronger throughout the session as things in general felt somewhat positive, according to traders.

The index went out around 96.70 bid, 96.85 offered, up from Tuesday's levels of 96.30 bid, 96.50 offered, traders said. At the open on Wednesday, the index was quoted around 96.55 bid, 96.75 offered, traders added.

"It was moving around a lot today," one trader said about the index. "Not a lot of volume. Just kind of circling."

The stock market was also better on Wednesday, with Nasdaq closing up 46.53 points, or 1.78%, Dow Jones Industrial Average closing up 196.23 points, or 1.48%, S&P 500 closing up 22.22 points, or 1.52%, and NYSE closing up 139.22 points, or 1.43%.

TECO closes

Greenstreet Equity Partners LP completed its buyout of TECO Transport Corp. from TECO Energy for $405 million in cash, according to a news release.

To help fund the transaction, TECO Transport got a new $340 million credit facility consisting of a $35 million revolver priced at Libor plus 375 bps, a $205 million first-lien term loan priced at Libor plus 375 bps and a $100 million second-lien term loan priced at Libor plus 750 bps.

The term loans were sold to investors at par.

The first-lien term loan carries 101 soft call protection for one year, and the second-lien term loan carries call protection of 102 in year one and 101 in year two.

Jefferies acted as the lead arranger and bookrunner on the deal, with Wells Fargo Foothill acting as syndication agent.

TECO Transport is a Tampa, Fla., water transportation company.

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