Domtar enters into $300 million term loan agreement via CoBank

By Sarah Lizee

Olympia, Wash., May 8 – Domtar Corp. entered into a $300 million term loan agreement on Tuesday with CoBank, ACB as agent, according to an 8-K filing with the Securities and Exchange Commission.

The loan was drawn at closing.

The term loan agreement requires quarterly repayment of principal of $3 million and matures on May 5, 2025.

The company intends to use the proceeds to repay other debt and to pay related fees and expenses.

Borrowings bear interest at a floating rate based on Libor plus a spread, though the exact rate was not disclosed in the filing.

The company is required to maintain a consolidated cash interest coverage ratio of not less than 3 to 1, and maintain a consolidated leverage ratio of not greater than 3.75 to 1.00, or 4 to 1 following a qualifying material acquisition.

Domtar makes paper and other fiber-based products and is based in Fort Mill, S.C.

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