Durango sets withdrawal rights end date in tender offer for series B step-up notes

By Laura Lutz

Des Moines, Sept. 26 - Corporacion Durango SAB de CV announced that the modified withdrawal rights termination date in its cash tender offer for its series B step-up rate senior secured guaranteed notes due 2012 will be Sept. 28.

As a result, tendered notes may be withdrawn before 5 p.m. ET on Sept. 28 - the offer expiration date. Tenders may be withdrawn after that time only if the company reduces the offer price, the early participation payment or the principal amount of notes subject to the offer.

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.

As previously announced, the Durango, Mexico, paper company also is soliciting consents to amend the note indenture and the common agreement to eliminate certain covenants and related events of default.

Durango said it will pay 103.125% for the notes, including a 3.125% early participation payment for those who tendered by the early deadline of 5 p.m. ET on July 5.

Those who tender also will receive accrued interest to the settlement date.

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

The offer is 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 has been executed.

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

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