NEW YORK - Credit Suisse First Boston committed itself to lend $5 billion to International Paper Co., the world's biggest paper maker, to finance its unsolicited offer for Champion International Corp., people familiar with the loan said.
International Paper of Purchase, N.Y., said Tuesday that it would pay $43 in cash and $21 in stock for each share and assume $2.3 billion of Champion debt. The offer topped by 21% a bid from Finnish rival UPM-Kymmene Oyj.
The Credit Suisse loan, which is meant to finance the cash portion of the acquisition, is one of the largest merger-related loans this year. The exact pricing and structure have yet to be determined, but the sources said most or all of the loan will probably be made up of a 364-day credit line to be repaid by an investment-grade bond.
International Paper said it plans to pay down debt using proceeds from more than $3 billion of expected asset sales by 2002.
The company has a $1 billion revolving credit arranged by Citigroup Inc.'s Salomon Smith Barney unit in March. The one-year loan is expected to yield 43 basis points more than the London interbank offered rate, with a fee of 7 basis points for parts of the loan that are not used.