Appvion sets talk on $575 million of new term loans with launch

By Sara Rosenberg

New York, June 4 - Appvion came out with price talk on its $375 million six-year first-lien term loan and a $200 million seven-year second-lien term loan with its Tuesday morning bank meeting, according to market sources.

The first-lien term loan is talked at Libor plus 400 basis points to 425 bps with a 1.25% Libor floor and an original issue discount of 99 to 991/2, and the second-lien term loan is talked at Libor plus 775 bps to 800 bps with a 1.25% Libor floor and a discount of 981/2, sources said.

Included in the first-lien term loan is 101 soft call protection for one year, and the second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three, sources continued.

Commitments are due on June 14.

Jefferies Finance LLC is leading the $575 million deal.

Proceeds will be used to refinance the company's 9¾% subordinated notes due 2014, 10½% secured notes due 2015 and its 11¼% second-lien notes due 2015.

First-lien leverage is 3 times and total leverage is 4.6 times, based on about $131.5 million of EBITDA.

Appvion (previously Appleton Papers Inc.) is an Appleton, Wis.-based producer of thermal, carbonless and security papers and Encapsys products.

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