Appleton Papers holders tender 84% of 8 1/8% notes, 77% of 9¾% notes in private exchange offers

By Angela McDaniels

Tacoma, Wash., Sept. 28 - Appleton Papers Inc. said it received tenders for approximately 84% of its 8 1/8% senior notes due 2011 and about 77% of its 9¾% senior subordinated notes due 2014 during private exchange offers and consent solicitations.

The offers began Aug. 18 and expired at midnight ET on Sept. 25 after being extended from Sept. 16. The consent date was Sept. 8, extended from Aug. 31.

Holders will receive $1,000 principal amount of new 11¼% second-lien notes due 2015 for each $1,000 principal amount of 8 1/8% notes plus an additional $10 principal amount of new notes for notes tendered by the consent date.

For the 9¾% notes, holders will receive $600 principal amount of new notes for each $1,000 principal amount of old notes plus an additional $25 principal amount of new notes for notes tendered by the consent date.

The settlement date is expected to be Sept. 30.

The company was soliciting consents to amend the indentures governing the old notes to eliminate some provisions, including substantially all of the restrictive covenants, to eliminate some events of default and to eliminate or modify related provisions.

Holders who tendered were deemed to have consented to the amendments, and holders could not deliver consents without tendering their notes.

On Sept. 10, the company announced that it had received consents from holders of a majority of the notes and had executed supplemental indentures.

The offers were subject to some conditions, including the receipt of consent from the lenders under Appleton's senior secured credit facility to the exchange offers and to the granting of liens to secure Appleton's obligations under the new notes and minimum tender conditions of 80% for the 8 1/8% notes and 70% for the 9¾% notes.

The new notes are senior obligations of Appleton, secured by a second-priority security interest in the assets currently securing Appleton's senior secured credit facilities, subject to some exceptions, and guaranteed by Paperweight Development Corp. and some of its direct and indirect subsidiaries that guarantee Appleton's obligations under its senior secured credit facilities.

The exchange offers and consent solicitations were made only to qualified institutional buyers and accredited investors inside the United States and to some non-U.S. investors located outside the United States who completed a related letter of representations.

Appleton Papers is a paper manufacturing company based in Appleton, Wis.

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