Cascades begins consent bid for its amended 7¼%, 6¾% notes, plans to tender for remaining notes

By Susanna Moon

Chicago, March 5 - Cascades Inc. said it began a consent solicitation for its 7¼% senior notes due 2013 and its 6¾% senior notes due 2013 in order to offer holders the same consideration paid to those who previously consented to the amendments under a tender offer that began Nov. 18.

The company said it previously received the required consents from noteholders, the amendments were adopted on Feb. 26 and that it entered into a supplemental indenture.

Cascades said it is soliciting consents to the effective amendments to satisfy its obligation under each note indenture.

Holders will receive a consent fee of C$7.50 cash per C$1,000 principal amount of notes.

The solicitation expires at 5 p.m. on March 18.

Cascades said it is not tendering for any notes under the consent solicitation, but that it plans to offer to purchase its 7¼% notes at C$1,010.00 per C$1,000 principal amount and its 6¾% notes for consideration of C$1,022.50 per note. The offer will be made through the company's wholly owned subsidiary Cascades Tenderco Inc.

As of March 4, all but C$10,125,000 principal amount of 7¼% notes and C$11,661,000 principal amount of 6¾% notes were owned by Cascades or its affiliates, according to a company press release.

Global Bondholder Services Corp. (866 470-3800 or 212 430-3774) is the consent agent for the solicitation.

Cascades tender offer

On Dec. 23 Cascades noted that Cascades Tenderco purchased an additional C$3.9 million of Cascades' 7¼% notes as well as C$1.3 million more of its 6¾% at the end of the offer following two previous settlements.

The offer had expired at 9 a.m. ET on Dec. 23.

The company previously settled purchases of C$31.2 million of 7¼% notes tendered after the early tender date of 5 p.m. ET on Dec. 2 and prior to 9 a.m. ET on Dec. 17 and C$187.9 million of 6¾% notes tendered in the offer prior to 9 a.m. ET on Dec. 17.

The company had made prior early purchases of C$494.6 million of 7¼% notes that had been tendered at the early tender date.

The total tender amounts ended up coming in at C$529.7 million of 7¼% notes and C$189.3 million of 6¾% notes.

For each C$1,000 principal amount, holders received C$1,020.00 for the 7¼% notes and C$1,011.25 for the 6¾% notes. The company also paid accrued interest.

The company funded the tender offer with the proceeds of its issue of 7¾% senior notes, which settled on Dec. 3.

The offer began Nov. 18 and was amended several times.

On Nov. 19, the company increased the payment for the 7¼% notes to C$1,020.00 from C$1,017.50 and raised the maximum amount of notes to be purchased to C$650 million from C$400 million.

On Dec. 2, the offer cap was increased to C$700 million.

On Dec. 9, the offer was amended to give the early tender payment of C$30.00 per note to all holders who tender instead of just those who tendered prior to the early tender deadline. The early tender payment is included in the C$1,020.00 and C$1,011.25 payouts noted above.

Also on Dec. 9, the offer expiration was extended to Dec. 23 from Dec. 17 and the offer cap was removed.

Banc of America Securities LLC (800 828-3182 or call collect 212 357-4692) and Wells Fargo Securities, LLC (866 309-6316 or call collect 704 715-8341) were the joint lead dealer managers. Global Bondholder Services (866 470-3800 or call collect 212 430-3774) was the depositary and information agent.

The company also said it completed its previously announced offering of $250 million of 7 7/8% senior notes due 2020.

Cascades is a Kingsey Falls, Quebec-based producer, converter and marketer of packaging and tissue products.

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