By Paul A. Harris
St. Louis, July 26 - Verso Paper Holdings LLC and Verso Paper Inc. priced $900 million of high-yield notes in three tranches on Wednesday, according to market sources.
The deal included a $350 million tranche of eight-year fixed-rate second-priority senior secured notes (B1/B+), which priced at par to yield 9 1/8%, on the tight end of the 9¼% area price talk.
In addition the company priced a $250 million tranche of eight-year floating-rate second-priority senior secured notes (B1/B+) at par to yield three-month Libor plus 375 basis points, 12.5 basis points inside of the Libor plus 400 basis points area price talk.
The deal also included a $300 million tranche of 10-year senior subordinated notes (B3/B-), which priced at par to yield 11 3/8%, 25 basis points beyond the 11% area price talk.
Credit Suisse and Lehman Brothers were joint bookrunners for the Rule 144A transaction. Citigroup, Banc of America Securities LLC and ABN Amro were co-managers.
Proceeds, along with a $485 million senior secured credit facility, will be used to fund the $1.4 billion acquisition of International Paper Co.'s coated and supercalendered papers business by Apollo Management.
The issuer is a Stamford, Conn.-based paper, packaging, forest products and chemical products company.
| Issuer: | Verso Paper Holdings LLC/Verso Paper Inc.
|
| Amount: | $900 million
|
| Bookrunners: | Credit Suisse, Lehman Brothers
|
| Co-managers: | Citigroup, Banc of America Securities LLC, ABN Amro
|
| Trade date: | July 26
|
| Settlement date: | Aug. 1
|
| Distribution: | Rule 144A
|
|
|
| Eight-year fixed-rate notes
|
| Amount: | $350 million
|
| Maturity: | Aug. 1, 2014
|
| Security description: | Fixed-rate second-priority senior secured notes
|
| Coupon: | 9 1/8%
|
| Price: | Par
|
| Yield: | 9 1/8%
|
| Spread: | 410 bps
|
| Call protection: | Four years
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B+
|
| Price talk: | 9¼% area
|
|
|
| Eight-year floaters
|
| Amount: | $250 million
|
| Maturity: | Aug. 1, 2014
|
| Security description: | Floating-rate second-priority senior secured notes
|
| Coupon: | Three-month Libor plus 375 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 375 bps
|
| Call protection: | Two years
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B+
|
| Price talk: | Libor plus 400 bps
|
|
|
| 10-year fixed-rate notes
|
| Amount: | $300 million
|
| Maturity: | Aug. 1, 2016
|
| Security description: | Senior subordinated notes
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| Coupon: | 11 3/8%
|
| Price: | Par
|
| Yield: | 11 3/8%
|
| Spread: | 633 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until Aug. 1, 2011, then callable at a premium
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Price talk: | 11% area
|
|
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