Bear Stearns has filled the "C" tranche created for Appleton Papers,with almost all the current investor group rolling into the deal. Closing will be on Thursday, said a banker, adding no new investors were invited into the deal. Some buysiders and bankers cited the deal as a challenge, pointing out the new $115 million "C" tranche is priced 1% below the existing "B," which offers a spread of LIBOR plus 4 1/4%. The original credit launched last year had to overcome concerns that Appleton operates in a sunset industry, at a time when the buyside was gun shy about committing to all but the defensive credits on offer (LMW, 8/10).
But one banker stated even at LIBOR plus 3 1/4%, the deal is well priced relative to other four B credits in the market. Investors bought it at 97 1/2% last year, and it's traded up north of par, while there is also a 10 basis points consent fee, he explained. "It's BB-/Ba3-most of the other credits are offering 2 1/2% over," he noted.