KapStone amends credit facility to add pricing tier, update covenants

By Marisa Wong

Morgantown, W.Va., Feb. 9 – KapStone Paper and Packaging Corp. amended its second amended and restated credit agreement on Tuesday to adjust pricing and modify covenants, according to an 8-K filing with the Securities and Exchange Commission.

The amendment modifies the pricing grid for interest rates and the unused commitment fee in order to add a pricing level applicable based on KapStone’s total leverage ratio. The pricing grid now consists of six tiers.

The interest rate is Libor plus 100 basis points to 200 bps for the company’s revolver and term loan A-1 and Libor plus 112.5 bps to 212.5 bps for the company’s term loan A-2. The unused commitment fee ranges from 20 bps to 32.5 bps.

The amendment modifies the financial covenant in the credit agreement related to maintenance of a maximum total leverage ratio by increasing the permitted total leverage ratio for fiscal quarters ending on or prior to June 30, 2018.

The amendment also modifies some defined terms used in the calculation of the financial covenants in a manner favorable to KapStone.

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

Based in Northbrook, Ill., KapStone is a producer of containerboard, unbleached kraft paper and corrugated products.

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