Appleton Papers extends tender for 12½% notes

New York, June 10 - Appleton Papers Inc. said it extended its tender offer for its $199.958 million principal amount of 12½% senior subordinated notes due 2008.

The offer was extended to 9 a.m. ET on June 11, subject to possible further extension, from the original deadline at midnight ET on June 9. As of the original deadline, holders had tendered $193.5 million of the bonds, about 96.5%.

Because the offer is being extended fewer that three days, Appleton said that previously set tender offer and total consideration prices for the notes determined on June 7 will remain in effect.

As previously announced, Appleton, an Appleton, Wis.-based maker of specialty paper and packaging products, said on May 12 that it had begun a cash tender offer for all of its $199.958 million of 12½% notes and was also soliciting consents to proposed indenture changes.

Appleton set a now-expired consent deadline of 5 p.m. ET on May 25. It said it would set pricing for the issue on June 7 and said the offer would expire at midnight ET on June 9, which was subsequently extended.

The company said it would calculate the consideration that it was offering noteholders on the second business day before the expiration (June 7), using a formula based, in part, on a 100 basis point fixed spread over the yield to maturity of the designated reference security, the 1 7/8% U.S. Treasury note due Nov. 30, 2005, at 11 a.m. ET on the pricing date.

It said holders who tender their notes by the consent deadline would receive a $30 per $1,000 principal amount consent payment as part of their total consideration, while holders tendering after the consent deadline would receive the basic purchase price but no consent payment.

All holders tendering their notes would also be paid accrued interest up to but not including the date of payment for the notes.

Holders tendering their notes would be required to consent to the proposed indenture amendments, aimed at eliminating certain restrictive covenants and related provisions. Holders could not tender without also delivering consents and vice versa. Any notes tendered and consents delivered at or before the consent deadline could be withdrawn after that time.

Appleton said the tender offer would be conditioned on, among other things, its ability to obtain financing necessary to complete the tender offer and certain related transactions.

Appleton said on May 26 that it had received the necessary consents from its 12½% notes to amend the indentures.

By the consent deadline of 5 p.m. ET on May 25, the company had obtained consents from holders of 96.5% of the securities. Appleton said it executed a supplemental indenture but this would only become effective when the tender offer is completed and the notes purchased.

On June 7, Appleton set the prices it will pay in its tender offer for its 12½% notes. For notes tendered before the consent deadline, the company will pay $1,192.78 per $1,000 principal amount. After that point and before the expiration date, Appleton will pay $1,162.78 per $1,000 principal amount.

Bear, Stearns & Co. Inc. (877 696-BEAR) and UBS Securities LLC (888 722-9552 ext. 4210 or 203 719-4210) are the dealer managers and solicitation agents. D.F. King & Co. Inc. is the information agent (banks and brokers call 212 269-5550; all others call 800 290-6427).

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