TD Securities last week launched syndication of a CAN$200 million credit facility for SFK Pulp Fund to partially fund two mills from AFR Holdco. The six-year, CAN$200 million senior secured term loan was priced at "market rates," according to a release, but actual pricing could not be determined. The company is also receiving a fully underwritten CAN$55 million senior secured revolver from a syndicate of Canadian chartered banks and one institutional investor to also help fund the acquisition, according to a release.
The financing will be used in part to acquire the American Fiber Resources Mill and the Great Lakes Pulp Mill from AFR Holdco for about $158.7 million. The term loan facility will also be used to repay the company's existing $125 million of debt. The remainder of the acquisition will be financed by the fully underwritten CAN$55 million senior secured revolver. SFK Pulp will also have a CAN$90 million offering of 7% convertible extendible unsecured subordinated notes.
SFK Pulp Fund operates a mill located in Saint-Félicien, Québec that supplies northern bleached softwood kraft pulp to various sectors of the paper industry in Canada, the U.S. and Europe. NBSK pulp is the industry's benchmark grade of pulp, mainly produced in Canada and Nordic countries. A spokeswoman declined comment.