Verso Paper Holdings completes $200 million credit facility

By Sara Rosenberg

New York, May 9 - Verso Paper Holdings LLC closed on a new $200 million five-year credit facility, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Citigroup Global Markets Inc., Barclays Bank plc and Credit Suisse Securities (USA) LLC acted as the joint lead arrangers and bookrunners on the facility that was completed on May 4.

The deal consists of a $150 million asset-backed revolver priced at Libor plus 200 basis points with a 50 bps unused fee and a $50 million cash flow facility priced at Libor plus 450 bps with a 62.5 bps unused fee.

Pricing on the asset-backed loan can range from Libor plus 175 bps to 225 and the unused fee can range from 37.5 bps to 50 bps, based on daily average usage, and pricing on the cash flow loan can range from Libor plus 425 bps to 475 bps based on leverage.

Covenants under the asset-based facility include a minimum fixed-charge coverage ratio when the excess availability is less than the greater of 10% of the borrowing base and the aggregate amount of revolver commitments at such time, or $10 million.

The cash flow loan has a maximum total first-lien leverage ratio when loans or letters of credit are outstanding under the facility.

Proceeds were used to repay the outstanding debt under the company's existing $200 million revolver and will be available for ongoing working capital and other general corporate purposes.

Verso is a Memphis, Tenn.-based producer of coated papers, including coated groundwood and coated freesheet, and specialty products.

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