AbitibiBowater Inc. (NYSE: ABH) is seeing shares surge after the open this morning. The paper and wood products company secured a financing pact that it had made a filing for earlier.
The company noted that this refinancing plan will fulfill its upcoming liquidity needs and will provide "sufficient financial flexibility." The total refinancing plan is roughly $1.4 billion. While the company is now based in Canada, the following terms are in U.S. Dollars:
- $400-500 million of new 364-day senior secured term loan secured by working capital and other assets;
- $400 million new senior secured notes or a term loan due 2011 secured by fixed assets;
- $200-300 million of new equity or equity-linked securities of AbitibiBowater Inc.
The company will start an exchange offer for some $500 million of the near-term maturities and will close out the maturities that were coming due in April, June, and August.
Shortly after the open, shares are up 17% at $11.81, which is above when the company announced its intent to refinance its debt and well above the $9.10 low that was recently put in. As far as a post-merger performer, this has been a disaster as the high was $37.45.
Jon C. Ogg
March 7, 2008