Appleton buys back $40.6 million in 8 1/8% notes, $7.5 million in 9¾% notes

By Devika Patel

Knoxville, Tenn., March 27 - Appleton Papers Inc. purchased $40.6 million of its 8 1/8% senior notes due June 15, 2011 during the fourth quarter, according to a 10-K filed Friday with the Securities and Exchange Commission. In addition, during January, Appleton purchased $7.5 million of its 9¾% senior subordinated notes due June 15, 2014.

The 8 1/8% notes were purchased in six separate blocks of $5.5 million, $6.9 million, $2.2 million, $5 million, $11.4 million and $9.6 million, with discounts of ranging from 30.5% to 31%.

The company recorded a $12.6 million gain on these purchases. Also as a result of these purchases, $1 million in deferred debt issuance costs were written off, resulting in a net gain of $11.6 million.

The 9¾% notes were purchased at a discount of 77.5% and resulted in a gain of $5.8 million. Deferred debt issuance costs of $300,000 were written off, resulting in a net gain of $5.5 million.

Appleton is an Appleton, Wis., manufacturer and distributor of specialty paper products.

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