Appleton Papers $435 mln credit facility levels set

By Paul A. Harris

St. Louis, Mo., Sept. 25 - Appleton Paper Inc. set levels Tuesday on a $435 million senior secured credit facility via Bear Stearns, according to a source close to the deal.

The bank deal includes a $75 million four-year revolver, a four-year $110 million term loan A, and five-year $250 million term loan B. At the bank meeting Tuesday, the revolver and the term loan A were set at Libor plus 300 basis points, and the term loan B at Libor plus 350 basis points.

Employees of Appleton Paper, through a newly formed Employee Stock Option Plan, are planning to acquire the company for $810 million from Arjo Wiggins Appleton, a U.K. paper producer, according to a source at the company.

The purchase will be funded with cash, proceeds from the credit facility, about $105 million of equity, $175 million in subordinated debt, and a $140 million payment-in-kind seller note that accretes to $305 million over eight years, according to a report Monday from Standard & Poor's.

Appleton, Wis.-based Appleton Paper was identified by S&P as the world's largest manufacturer of carbonless paper, which is used in multi-part forms such as invoices, credit card receipts, and packing slips.

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