Sylvamo signs $450 million revolver and $520 million term loan F

Chicago, Sept. 15 – Sylvamo Corp. detailed the credit financing the company entered into to help fund the spinoff of the company from International Paper, according to an 8-K filing with the Securities and Exchange Commission on Wednesday.

In addition to the previously reported $450 million term loan B, the company received a $450 million revolver and a $520 million term loan F.

The agreement was signed on Monday.

Revolver

The revolver matures on Sept. 13, 2026.

Interest initially is set at Libor plus 175 basis points. There is a 0% floor.

The commitment fee is initially 27.5 bps.

Pricing is based on a leveraged-based pricing grid and ranges from Libor plus 150 bps to 200 bps.

There is a sub-facility on the revolver of $100 million for standby and commercial letters of credit and $25 million available for swingline loans.

Up to half of the commitments can be drawn in euros.

There is an expectation that $100 million will be drawn before the spinoff to finance a special payment with additional proceeds in excess of $100 million available to pay certain fees and expenses relating to the spinoff.

After the spinoff, proceeds can be used for working capital and other general corporate purposes.

The company has the option to amend the revolver to establish environmental, social and governance targets which will be used to adjust pricing.

Term loan F

Interest on the term loan will be Libor plus 190 bps, initially, with a 0% Libor floor.

Pricing is based on a leveraged-based pricing grid, ranging between Libor plus 175 bps and 215 bps.

Proceeds from the term loan F will be used to finance new or previous investments, which may take the form of a distribution to International Paper Co., that allow Sylvamo’s pulp and paper mills to generate electric power from renewable energy sources and to use the renewable power for operations.

Additional notes

Individual lenders can grant extensions under either the term loan facilities or the revolver.

The term loan facilities and revolver can be expanded by the greater of $250 million and an amount equal to 50% of the company’s consolidated EBITDA for the most recently completed four fiscal quarters, plus the principal amount of certain voluntary repayments of the loans under the senior secured credit facilities and open market purchases plus an unlimited amount so long as the pro forma consolidated secured leverage ratio does not rise above a specified point.

Based on the company’s consolidated total leverage ratio, mandatory prepayments on the term loans are required based on excess cash flow.

The term facilities also have a quarterly amortization schedule, initially set at 0.625% of the principal amount and increasing after a year to 1.25% of the original principal amount.

Bank of America, NA is the administrative agent, swingline lender and a letter of credit issuer.

Bank of America, JPMorgan Chase Bank, NA, CoBank, ACB, BNP Paribas Securities Corp., Credit Agricole CIB, PNC Capital Markets LLC and Sumitomo Mitsui Banking Corp. are listed as joint lead arrangers and joint bookrunners for the revolver and the term B facility.

CoBank was the sole lead arranger and bookrunner for the term F facility.

JPMorgan is the syndication agent.

Documentation agents are listed as BNP Paribas, Credit Agricole, PNC and Sumitomo Mitsui for the revolver and the term B facility.

First Horizon Bank and Pinnacle Bank are the co-managing agents.

Credit Agricole is the sustainability structuring agent.

Sylvamo is a Memphis-based printing papers company.

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