NewPage Holdings announced that its wholly owned subsidiary, NewPage Corporation, closed on financing consisting of a new $750 million term loan facility led by Credit Suisse Securities and a new $350 million ABL facility led by Barclays Bank.

Amounts drawn under the term loan facility will bear interest at either the LIBOR rate plus a margin of 8.25% or at a base rate plus a margin of 7.25%, and amounts drawn under the ABL facility bear annual interest at either the LIBOR rate plus a margin of 1.75% to 2.25% or at a base rate plus a margin of 0.75% to 1.25% (subject to adjustments based on utilization of the ABL facility).

The closing of the facilities is the first in a series of actions connected with the pending merger announced January 6, 2014 between Verso Paper Corporation and NewPage.

“The announcement regarding the bank refinancing is a key milestone as we work through the transaction,” said Jay A. Epstein, SVP and CFO for NewPage.

The proceeds of the term loan will be used to pay approximately $250 million in cash to NewPage stockholders and restricted stock unit holders upon vesting, to pay certain transaction costs and for general corporate purposes. The balance will be used to refinance the NewPage existing $500 million term loan.

The term loan facility matures on February 11, 2021, and the ABL facility matures on February 11, 2019. The facilities are guaranteed by certain subsidiaries of NewPage. Amounts outstanding under the facilities are secured by substantially all of the assets of NewPage and certain of its subsidiaries, subject to certain exceptions.

Miamisburg, OH-headquartered NewPage is a producer of printing and specialty papers in North America with $3.1 billion in net sales for the year ended December 31, 2012.