Sylvamo talks downsized $450 million eight-year notes at 6¾%-7%; books close Friday

By Paul A. Harris

Portland, Ore., Aug. 19 – Sylvamo Corp. downsized its offering of eight-year senior notes (B1/BB) to $450 million from $500 million and talked the notes to yield 6¾% to 7% on Thursday, according to market sources.

Official talk comes well wide to early guidance in the high 5% area, a bond trader said.

Along with price talk came covenant changes which primarily bear upon how the company may disburse cash and incur additional debt.

Books close at 10 a.m. ET on Friday.

BofA Securities Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Credit Agricole CIB, PNC Capital Markets LLC and SMBC Nikko Securities America Inc. are the joint bookrunners. FHN Financial Securities Corp. is the co-manager.

The Rule 144A and Regulation S notes become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback at par plus the full coupon and have a 101% poison put.

The Memphis-based uncoated paper producer, which is being spun off from International Paper Co., plans to use proceeds plus borrowings under senior secured credit facilities to make a special payment to International Paper in advance of the spinoff.

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