Bear Stearns has filled the "C" tranche created for Appleton Papers, with almost all the current investor group rolling into the deal. The deal was set to close last 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 41/ 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 that, even at LIBOR plus 31/ 4%, the deal is well priced relative to the 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 carrying a 10 basis points consent fee, he explained. "It's BB-/Ba3; most of the other credits are offering 21/ 2% over," he noted.