Durango buys back $419.6 million of step-up notes in tender

By Susanna Moon

Chicago, Oct. 5 - Corporacion Durango, SAB de CV said investors tendered $419.6 million in principal amount of its series B step-up rate senior secured guaranteed notes due 2012.

The offer expired at 9 a.m. ET on Oct. 5.

Durango said it would pay 103.125% for the notes, including a 3.125% premium for those who tendered by the early deadline of 5 p.m. ET on July 5. The payout also includes accrued interest.

By the old offer end date of Sept. 28, $377,301,257, or 89.9%, of the notes had been tendered.

As previously reported, the offer has been extended repeatedly. It previously was set to expire July 19, July 26, Aug. 3 and Sept. 14.

As of 5 p.m. ET on Sept. 13, investors had tendered $374,445,224, or 89.2%, of the notes. Of those, $359,730,986 of the notes, or 85.7% of the total outstanding, were tendered by the early participation date.

The response was up from $367,568,212, or 87.6%, of the notes on July 26 and from $364,671,818, or 86.9%, on July 19.

The Durango, Mexico, paper company also solicited consents to amend the note indenture and the common agreement to eliminate certain covenants and related events of default.

The company needed consents from holders of a majority of notes.

The offer was conditioned upon the execution of a supplemental indenture, tenders from holders of a majority of notes and the receipt of at least $520 million of proceeds from a note issue as well as shareholder approval. Shareholder approval has now been obtained and the supplemental indenture is now effective.

Merrill Lynch, Pierce, Fenner & Smith Inc. is the dealer manager (attn: Liability Management Group at 888 654-8637 or call collect at 212 449-4914). Global Bondholder Services Corp. is the information agent (866 794-2200 or call collect 212 430-3774).

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