NewPage, shareholder begin tender offers for four series of notes

By Angela McDaniels

Tacoma, Wash., July 15 - NewPage Corp. has begun a tender offer for its $225 million of floating-rate senior secured notes due 2012 and its $806 million of 10% senior secured notes due 2012, according to a company news release.

A second tender offer is being held for NewPage Holding Corp.'s $196,200,734 of floating-rate senior unsecured pay-in-kind notes due 2013 and NewPage's $200 million of 12% senior subordinated notes due 2013.

The first offer is being conducted by NewPage and NP Investor LLC, an affiliate of Cerberus Capital Management, LP, the indirect controlling shareholder of NewPage Holding. The second offer is being held by NP Investor.

In addition, Stora Enso Oyj, the holder of NewPage Group Inc.'s floating-rate senior unsecured PIK notes due 2015, has agreed to contribute up to $150 million of accreted principal amount of the notes in exchange for notes purchased by NP Investor in the offer.

NewPage said that NP Investor currently intends to hold for investment any notes purchased by it in the offers and is under no obligation to contribute any notes to Stora Enso.

First offer

NewPage and NP are offering to purchase the maximum principal amount of floaters and 10% notes that they can purchase for $180 million. NewPage will fund up to $130 million of this amount.

Notes purchased by NewPage and NP Investor will be allocated between the two on a pro rata basis as determined by their relative participation in the maximum payment amount.

NewPage intends to finance its portion with some of the proceeds from a proposed offering of new senior secured notes due 2014.

The total payment amount per note will be determined through a modified Dutch auction. Holders who tender should specify a bid of between $430 and $530 per $1,000 principal amount of the floaters and $450 to $550 per $1,000 principal amount of the 10% notes.

The bid price includes an early participation premium of $30 for each note tendered by the early participation time.

For each notes series, the companies will select the bid price that will allow them to spend a total of $180 million by accepting all notes tendered at or below that price.

If the offer is oversubscribed, then holders who tendered at the selected price will be subject to proration.

Holders will also receive accrued interest through the day prior to the purchase date.

Second offer

NP Investor is offering to purchase any and all of NewPage Holding's PIK floaters and the maximum principal amount of 12% notes that will allow it to spend no more than $85 million.

All PIK floaters tendered will be accepted for purchase before any tendered 12% notes are accepted for purchase.

Holders will receive $250 per $1,000 principal amount of PIK floaters and $350 for each $1,000 principal amount of 12% notes.

In each case, the payout includes a $30 early participation premium for each note tendered by the early participation time.

Holders of the 12% notes will receive accrued interest through the day prior to the purchase date. Holders of the PIK floaters will not.

Both offers expire at midnight ET on Aug. 11. The early participation time for both is 5 p.m. ET on July 28.

Both offers are conditioned on the successful completion of the other, the amendment of NewPage's senior secured term loan credit facility and revolving credit facility and the purchase and cancellation of a portion of the outstanding balance under the term loan credit facility as well as certain other terms and conditions.

The first tender offer is also conditioned on the completion of NewPage's proposed offering of new senior secured notes due 2014.

Citigroup Global Markets Inc. (212 723-6106 or 800 558 3745) is the lead dealer manager, with Banc of America Securities LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co. as additional dealer managers and Barclays Capital Inc. as co-manager.

Global Bondholder Services Corp. (212 430-3774 or 866 470-3700) is the information agent.

NewPage is a coated paper manufacturer based in Miamisburg, Ohio.

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