KapStone pro rata priced at Libor plus 300 bps, B loan at Libor plus 350 bps

By Sara Rosenberg

New York, June 13 - KapStone Paper and Packaging Corp.'s recently completed revolver and term loan A are priced at Libor plus 300 basis points, and its term loan B debt is priced at Libor plus 350 bps, according to an 8-K filed with the Securities and Exchange Commission Friday.

The revolver has a 50 bps undrawn fee.

Tranching on the deal is comprised of a $100 million five-year revolver, a $390 million five-year term loan A, a $25 million seven-year term loan B-1 and a $40 million seven-year term loan B-2 that will be reduced if private placement notes are issued by the company.

Bank of America acted as the lead bank on the $555 million senior secured deal that was completed on June 12.

Covenants include a total leverage ratio and a fixed charge coverage ratio.

Proceeds, along with cash on hand, will be used to pay for the acquisition of the North Charleston Kraft Division from MeadWestvaco Corp., to repay KapStone's existing credit facility and to provide for working capital.

Funding under the credit facility is subject to closing conditions, including the simultaneous closing of the acquisition, which is expected to occur in the third quarter.

Until the deal funds, the company is required to pay a 50 bps ticking fee.

KapStone is a Northbrook Ill.-based producer of kraft paper and converter of inflatable dunnage bags.

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