OMX Timber Finance II issues installment notes default notice after bankruptcy of guarantor Lehman

By Caroline Salls

Pittsburgh, Sept. 18 - OMX Timber Finance Investments II, LLC has delivered a notice of default on $817.5 million of installment notes that were issued by Boise Land & Timber II, LLC to secure OMX's securitization notes.

The default stems from the bankruptcy filing made by installment notes guarantor Lehman Brothers Holdings Inc.

OMX said it issued the $735 million principal amount of securitization notes in connection with a sale of timberlands in 2004.

OMX Timber II said it is assessing its default-related rights and it is not waiving or agreeing to forbear from acting on the default.

Meanwhile, OMX parent company OfficeMax Inc. said it is monitoring the events related to Lehman Brothers' bankruptcy and it will continue to evaluate the status of the installment notes and the possible ongoing impact on OfficeMax.

According to the 8-K, recourse on the securitization notes is limited to the pledged installment notes, and OfficeMax has no obligation under the securitization notes.

However, if there were to be a payment default on the installment notes, OfficeMax said it could suffer adverse consequences.

OMX Timber is a wholly owned bankruptcy remote subsidiary of OfficeMax, an Itasca, Ill.-based provider of office supplies, technology products and solutions and furniture to businesses and consumers.

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