Syndication of the bank financing for the approximately $21 billion acquisition of Georgia-Pacific Corp. by Koch is set to launch this week. Citigroup is underwriting the $11 billion in loans and JPMorgan and Deutsche Bank are the joint bookrunners. Bank of America is also involved in the deal. The financing is expected to consist of a $5 billion term loan "B," a $2.5 billion second lien, a $2 billion "A" tranche and a $1.5 billion revolver (CIN, 12/12). Pricing could not be determined. Koch is buying Georgia-Pacific for $13.2 billion plus $8 billion of assumed or refinanced debt.
In late December, Standard & Poor's lowered the long-term corporate ratings and senior unsecured ratings on Georgia-Pacific to BB- from BB+. It also lowered the ratings on Koch Cellulose to BB- from BB. The ratings agency said the downgrade reflects the significant increase in debt associated with the acquisition. At closing, the total debt of Georgia-Pacific will be about $17 billion. Spokeswomen for Georgia-Pacific and Koch could not be reached. Calls to a banker at Citigroup were not returned.