Schweitzer-Mauduit gets $648 million bridge commitment with merger

By Sara Rosenberg

New York, March 28 – Schweitzer-Mauduit International Inc. has received a commitment for a $648 million 364-day senior unsecured bridge loan in connection with its merger with Neenah Inc., according to an 8-K filed with the Securities and Exchange Commission on Monday.

JPMorgan Chase Bank is the lead on the debt.

Pricing on the bridge loan is SOFR+CSA plus 925 basis points, with 50 bps step-ups every 90 days until it reaches SOFR+CSA plus 1,075 bps, and a 0.75% floor.

The company intends to issue senior notes and/or obtain a new incremental senior secured term loan B, and issue equity as the permanent financing to replace the bridge loan.

As part of the potential permanent financing, the company has received a commitment from JPMorgan for a $348 million incremental covenant-lite term loan B with the same maturity as its existing term loan B.

The commitment letter has incremental term loan pricing at SOFR+CSA plus 450 bps with a 0.75% floor.

CSA on the bridge loan and incremental term loan is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate.

Amortization on the incremental term loan is 1% per annum.

In addition, the company has a commitment for a $500 million senior secured revolving credit facility to replace its existing revolver.

Proceeds from the permanent financing will be used to refinance existing debt and for general corporate purposes.

Under the merger agreement, shareholders of Neenah will receive 1.358 shares of Schweitzer-Mauduit common stock for each share of Neenah common stock owned. Upon closing, Schweitzer-Mauduit shareholders will own about 58% of the combined company and Neenah shareholders will own about 42%.

Closing is expected in the second half of 2022, subject to shareholder approval at both companies, regulatory approvals and other customary conditions.

Schweitzer-Mauduit and Neenah are Alpharetta, Ga.-based manufacturers of specialty materials. A new name for the combined company will be selected in connection with the merger.

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