New Issue: Mercer prices $50 million tap of 9½% notes at 104.5 to yield 7.941%

By Paul A. Harris

Portland, Ore., July 17 - Mercer International Inc. priced a $50 million tack-on to its 9½% senior notes due Dec. 1, 2017 (existing ratings B3/B) at 104.5 on Wednesday, according to an informed source.

The reoffer price, which came at the rich end of the 104.25 to 104.5 price talk, rendered a yield to worst of 7.941%.

Credit Suisse was the bookrunner.

Proceeds will be used for general corporate purposes.

The issuer is a pulp manufacturing company based in Vancouver, B.C., with U.S. headquarters in Seattle.

Issuer:	Mercer International Inc.
Face amount:	$50 million
Proceeds:	$52 million
Maturity:	Dec. 1, 2017
Security description:	Tack-on to 9½% senior notes due Dec. 1, 2017
Bookrunner:	Credit Suisse Securities (USA) LLC
Coupon:	9½%
Price:	104.5
Yield to worst:	7.941%
Spread:	719 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Dec. 1, 2014, then callable 104.75, 102.375, declining to par on and after Dec. 1, 2016
Equity clawback:	For 35% at 109.5 until Dec. 1, 2013
Investor put:	101% upon change of control
Trade date:	July 17
Settlement date:	July 22 with accrued interest
Existing ratings:	Moody's: B3
	Standard & Poor's: B
Distribution:	SEC registered
Price talk:	104.25 to 104.5
Marketing:	Quick to market
Original issue:	$300 million priced at par in November 2010
Fungibility:	Tack-on notes will be immediately fungible with the existing notes
Total issue size:	$350 million

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