14 Jan, 2021

Mercer International prints upsized $875M of 8-year notes at par to yield 5.125%

Mercer International Inc. has cleared its $875 million offering of eight-year senior unsecured notes tight of price guidance. Credit Suisse was lead bookrunner for the deal, which finalized with a $375 million upsize.

Proceeds from the new bonds will be used alongside cash on hand to refinance all the company's outstanding 6.5% senior notes due 2024 and 7.375% senior notes due 2025 and for general corporate purposes. Ahead of the upsize, the deal was originally proposed to refinance in full the 2024 bonds and a portion of the 2025 maturity.

Vancouver-based Mercer International is a manufacturer of northern bleached softwood kraft pulp in North America, Europe and Asia. Terms:

Issuer Mercer International
Ratings B+/Ba3
Amount $875 million
Issue Senior unsecured notes (144A/Reg S with registration rights)
Coupon 5.125%
Price 100
Yield 5.125%
Spread T+418
Maturity Feb. 1, 2029
Call Non-call three (first call at par plus 50% coupon)
Trade (date) Jan. 14, 2021
Settle Jan. 26, 2021 (T+7)
Bookrunners CS (left lead)/Barc/RBC
Price talk 5.25%-5.50%
Notes Upsized from $500 million; up-to-35% equity claw at 105.125% until Feb. 1, 2024; change of control put at 101