Appleton Papers $375 million credit facility to launch Thursday

By Sara Rosenberg

New York, May 12 - Appleton Papers Inc. is scheduled to hold a bank meeting on Thursday for a proposed $375 million credit facility, according to a market source. Bear Stearns and UBS are the lead banks on the deal, with Bear listed on the left.

The facility consists of a $125 million five-year revolver talked at Libor plus 250 basis points and a $250 million six-year term loan B talked at Libor plus 250 basis points, the source said.

The term loan amortizes at a rate of 1% each year with the balance due at maturity.

Total leverage is 3.6x, and senior leverage is 2.5x. The deal is expected to generate low four B ratings, the source added.

Proceeds from the credit facility, combined with proceeds from a proposed $150 million senior notes offering and a proposed $200 million senior subordinated notes offering, will be used to repay debt.

On Wednesday, the company announced that it commenced a cash tender offer for its $199.958 million of outstanding 12½% senior subordinated notes due 2008. The tender offer expires on June 9.

Appleton is an Appleton, Wis., manufacturer and distributor of paper and paperboard products.

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