Verso Amends Subordinated Debt Exchange Offer, Holders of 70 Percent of Notes Participating
MEMPHIS, TN—July 25, 2014—Verso Paper has announced that two of its wholly-owned subsidiaries, Verso Paper Holdings and Verso Paper (collectively, the "Issuers"), have amended the terms of their previously announced exchange offer and consent solicitation with respect to their outstanding 11 3/8 percent Senior Subordinated Notes due 2016 (the "Old Subordinated Notes" and, the related exchange offer, the "Subordinated Notes Exchange Offer").
The Subordinated Notes Exchange Offer, together with the Issuers' previously announced exchange offer and consent solicitation with respect to their outstanding 8.75 percent Second Priority Senior Secured Notes due 2019 (the "Old Second Lien Notes" and, the related exchange offer, the "Second Lien Notes Exchange Offer") are being conducted pursuant to the Agreement and Plan of Merger dated as of January 3, 2014 (the "Merger Agreement"), among Verso, Verso Merger Sub Inc. ("Merger Sub") and NewPage Holdings Inc. ("NewPage"), pursuant to which Verso will acquire NewPage by means of the merger of Merger Sub with and into NewPage on the terms and subject to the conditions set forth in the Merger Agreement (the "Merger"), with NewPage surviving the Merger as an indirect, wholly owned subsidiary of Verso. The closing of the Merger is conditioned upon consummation of the exchange offers.
Verso also announced that the Second Lien Notes Exchange Offer has been amended to give holders of Old Second Lien Notes who tender before the Second Lien Notes Expiration Time (as defined below) on July 30, 2014 the same consideration as those who tendered prior to the Second Lien Notes Early Tender Time (as defined below) on July 16, 2014.
As of July 23, 2014, holders of approximately $99.7 million in aggregate principal amount of Old Subordinated Notes have tendered their Old Subordinated Notes or agreed with Verso and the Issuers to tender their Old Subordinated Notes in the amended Subordinated Notes Exchange Offer, and holders of approximately $286.9 million in aggregate principal amount of Old Second Lien Notes have tendered their Old Second Lien Notes in the Second Lien Notes Exchange Offer.
"We thank the holders of our Old Second Lien Notes and Old Subordinated Notes who have committed to the exchange offers for their support," said Verso President and CEO Dave Paterson, "Successful completion of the exchange offers is an important step toward the closing of our acquisition of NewPage."
Amendment to Subordinated Notes Exchange Offer
The Subordinated Notes Exchange Offer and the Subordinated Notes consent solicitation have been amended as set forth in the table below:
If holders in the aggregate tender a percentage of Old Subordinated Notes that is not set forth in the table above, holders will receive the principal amount corresponding to the closest lower percentage (e.g., if 87.5 percent of the Old Subordinated Notes are tendered, holders will receive the principal amount corresponding to 85 percent).
The Issuers have also amended the terms of the New Subordinated Notes as follows: upon the consummation of the Merger, (i) the principal amount of the outstanding New Subordinated Notes will be adjusted such that a holder of $1,000 principal amount of New Subordinated Notes immediately prior to the Merger will hold $710 principal amount of New Subordinated Notes immediately following the Merger (assuming 100 percent participation in the Subordinated Notes Exchange Offer), (ii) the maturity date of the New Subordinated Notes will be extended to August 1, 2020 and (iii) the interest rate will be adjusted such that the New Subordinated Notes will bear interest from and after the date of the consummation of the Merger at a rate of 11 percent per annum payable in cash plus 5 percent per annum payable by increasing the principal amount of the outstanding New Subordinated Notes or by issuing additional New Subordinated Notes.
Following the consummation of the Merger, the Issuers may redeem the New Subordinated Notes, in whole or in part, at any time prior to August 1, 2017 at a redemption price equal to 100 percent of the principal amount thereof, plus accrued and unpaid interest, if any, plus a make-whole premium. At any time following the consummation of the Merger and on or after August 1, 2017, August 1, 2018 or August 1, 2019, the Issuers may redeem the New Subordinated Notes at their option at 105.500 percent, 102.750 percent and 100.000 percent, respectively.
The consummation of the Subordinated Notes Exchange Offer is conditioned upon, among other things, the valid tender, and not withdrawal, of at least 70 percent in aggregate principal amount of outstanding Old Subordinated Notes. The Issuers will make alternative arrangements on similar economic terms to the Subordinated Notes Exchange Offer for holders who are not Eligible Holders; the 70 percent minimum condition will include in it any Old Subordinated Notes held by such holders that tender pursuant to such alternative arrangements.
Eligible Holders who validly tender Old Subordinated Notes prior to 12:00 midnight, New York City time, at the end of July 30, 2014 (such date and time, as it may be extended by us, the "Subordinated Notes Early Tender Time") and do not validly withdraw their tender prior to 12:00 midnight, New York City time, at the end of July 30, 2014 will receive the Subordinated Notes Total Consideration for Old Subordinated Notes accepted in the Subordinated Notes Exchange Offer. "Subordinated Notes Total Consideration" means, for each $1,000 principal amount of Old Subordinated Notes tendered and accepted by us, $1,000 principal amount of New Subordinated Notes (which includes the Subordinated Notes consent and early tender payment of $150 principal amount of New Subordinated Notes), without giving effect to the adjustment in principal amount upon the consummation of the Merger, and the Subordinated Notes Warrant Consideration. The expiration time of the Subordinated Notes Exchange Offer is being extended from 12:00 midnight, New York City time, at the end of July 30, 2014, to 12:00 midnight, New York City time, at the end of August 6, 2014 (such date and time, as it may be extended by us, the "Subordinated Notes Expiration Time") so that Eligible Holders who validly tender Old Subordinated Notes after the Subordinated Notes Early Tender Time will receive the Subordinated Notes Exchange Consideration for Old Subordinated Notes accepted in the Subordinated Notes Exchange Offer. "Subordinated Notes Exchange Consideration" means, for each $1,000 principal amount of Old Subordinated Notes tendered and accepted by us, $850 principal amount of New Subordinated Notes, without giving effect to the adjustment in principal amount upon the consummation of the Merger, and the Subordinated Notes Warrant Consideration.
Subject to the terms and conditions described in the Offering Documents (as defined below), payment of the Subordinated Notes Total Consideration or Subordinated Notes Exchange Consideration will occur promptly after the Subordinated Notes Early Tender Time or the Subordinated Notes Expiration Time, as applicable.
The Issuers will not pay accrued and unpaid interest on the Old Subordinated Notes exchanged on the early settlement date or the final settlement date of the Subordinated Notes Exchange Offer; interest on the New Subordinated Notes will accrue from August 1, 2014.
Amendment to Second Lien Notes Exchange Offer
The Issuers have amended the terms of the Second Lien Notes Exchange Offer so that the Second Lien Notes Exchange Consideration (as defined in the Offering Documents) per $1,000 principal amount of Old Second Lien Notes tendered after 12:00 midnight, New York City time, at the end of July 16, 2014 (the "Second Lien Notes Early Tender Time") will include $1,000 principal amount of new Second Priority Adjustable Senior Secured Notes ("New Second Lien Notes") instead of $950 principal amount of New Second Lien Notes. As a result, holders of Old Second Lien Notes that validly tender Old Second Lien Notes after the Second Lien Notes Early Tender Time, but prior to 12:00 midnight, New York City time, at the end of July 30, 2014 (such date and time, as it may be extended by us, the "Second Lien Notes Expiration Time"), will now receive for each $1,000 principal amount of Old Second Lien Notes tendered and accepted by us, $1,000 principal amount of New Second Lien Notes, without giving effect to the adjustment in principal amount upon the consummation of the Merger, and the Second Lien Notes Warrant Consideration (as defined in the Offering Documents).
About Verso Paper
Verso Paper is a leading North American producer of coated papers, including coated groundwood and coated freesheet, and specialty products. Verso is headquartered in Memphis, TN, and owns three paper mills in Maine and Michigan. Verso's paper products are used primarily in media and marketing applications, including magazines, catalogs and commercial printing applications such as high-end advertising brochures, annual reports and direct-mail advertising.
Source: Verso Paper.
- Companies:
- NewPage Corp.
- Verso Paper