China's Nine Dragons Paper begins discounted tender offer for 7 7/8% bullet notes

By Angela McDaniels

Tacoma, Wash., Feb. 9 - Nine Dragons Paper (Holdings ) Ltd. began a tender offer for its $283.75 million of outstanding 7 7/8% senior bullet notes due 2013, according to a company news release.

For each $1,000 principal amount, the company is offering $480 for notes tendered by the early tender date and $530 for notes tendered after that time but before the offer expiration.

Holders will also receive accrued interest up to but excluding the payment date, which is expected to be March 12.

The early tender date is 5 p.m. ET on Feb. 23, and the offer will expire at midnight ET on March 9.

The maximum amount payable in the offer, excluding interest, is $160 million. The offer will be funded with internal resources.

The notes' coupon is subject to adjustment from time to time based on the company's ratings. Nine Dragons said that based on its current ratings, the interest rate payable on the next interest payment date, April 29, would be 9 7/8%.

The offer is not conditioned on a minimum amount of notes being tendered.

Merrill Lynch & Co. is the dealer manager, and Bondholder Communications Group is the information agent.

Nine Dragons produces packaging paperboard products. The company is incorporated in Bermuda and based in Guangdong, China.

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