It is still early days on Exopack's $110 million credit - launched by BNP Paribas, CIT Group and Heller Financial last week -- but bankers suggest the asset-based deal will be a relatively safe bet right now. The credit includes a $60 million revolver, a $30 million term loan "A" and a $20 million capital expenditure facility. There is strong collateral and asset coverage, which is what lenders are looking for right now, bankers said. Pricing on the pro rata is LIBOR plus 3% based off a grid, noted a banker.
The credit backs the leveraged buyout of International Paper's flexible packaging business to Houston-based private equity firm Sterling Group, announced in August. Pat Woods, president of Exopack, based in Spartanburg, S.C., said the decision was made earlier this year to pursue an asset-based rather than a more typical structure, because of market conditions. He referred further questions to officials at Sterling, who did not return calls.