Clearwater Paper secures US$475m refinancing with borrowing-base revolver

Clearwater Paper has completed a US$475m secured refinancing that replaces its existing asset-based lending facility and 2028 notes while retaining receivables and inventory as the borrowing base for a new US$200m revolver.

The US paperboard producer entered the financing agreement on 18 September and disclosed the transaction on 21 September.

The package consists of a US$275m term loan, which was fully drawn at closing, and a US$200m revolving facility. Only approximately US$15m was outstanding under the revolver at closing.

AgWest Farm Credit acts as administrative agent for the lender syndicate.

Clearwater used the refinancing proceeds to repay and terminate its existing ABL facility, fund the redemption of US$275m of 4.750 per cent senior notes due in 2028 and meet transaction costs.

Although the company describes the previous ABL as having been replaced, the new revolver retains clear asset-based mechanics.

Availability is capped by a borrowing base calculated from eligible receivables and inventory. The credit agreement starts with an advance rate equal to 85 per cent of eligible accounts receivable, alongside separate advance rates for eligible log, pulp and other inventory categories.

That means liquidity can expand and contract with the eligible working-capital assets supporting the facility rather than simply providing an unrestricted US$200m corporate revolver.

Both the term loan and revolving borrowings made at closing initially carry an interest rate of 8.25 per cent a year. The facilities mature on 18 September 2031.

The revolver includes a US$10m letter-of-credit sublimit. Clearwater may also seek up to US$100m of additional revolving commitments after delivering its 2027 year-end financial statements, subject to lender participation and other conditions. That US$100m is uncommitted and should not be counted as current facility capacity.

The financing is secured by substantially all of Clearwater’s personal property and, after specified post-closing steps, material real estate including its mills in Georgia, Arkansas and Idaho.

For working-capital financiers, the important feature is therefore not simply the maturity extension. Clearwater has refinanced long-term debt while preserving a collateral-linked revolving structure in which receivables and inventory remain central to ongoing liquidity.