Georgia-Pacific LCDS Tighten On Industry Merger News

The loan-only credit default swaps of Georgia-Pacific Corp. tightened last week by about 15 basis points to 110 -115.

  • 25 Aug 2006
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The loan-only credit default swaps of Georgia-Pacific Corp. tightened last week by about 15 basis points to 110 -115. One dealer said the tightening may be attributed to the news that the fine paper business of Weyerhaeuser Co., one of the world's largest lumber companies, and Domtar, a Canadian maker of paper, will combine. Georgia-Pacific's term loan "B" increased slightly last week, from trading at 99.946-100.208 on Friday Aug. 18 to 99.971-100.242 last Thursday, according to Markit.

Weyerhaeuser reached an agreement last Thursday to combine its fine paper business with Domtar, which will give its shareholders 55% ownership in the new company, to be called Domtar. The new company will have its head office in Montreal and its headquarters of operations in Fort Mill, S.C. It will continue to operate separately until the transaction closes. A Weyerhaeuser spokesman said the transaction is not expected to be completed for about six months. Weyerhaeuser's financial advisor was Morgan Stanley. JPMorgan and RBC Dominion were Domtar's financial advisors. A spokesman from Domtar did not return a call.

The credit backing Koch's acquisition of Georgia-Pacific for $21 billion launched back in January. Citigroup, JPMorgan and Deutsche Bank lead the deal. A G-P spokeswoman did not return a call (CIN 1/16).

  • 25 Aug 2006

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