Vertis second-lien noteholders amend forbearance, restructuring agreement due May 20

By Caroline Salls

Pittsburgh, May 16 - Vertis, Inc.'s second-lien noteholders have agreed to amend a forbearance agreement related to a potential default arising from the company's decision to skip a $17.1 million interest payment on its 9¾% senior secured second-lien notes, according to an 8-K filed with the Securities and Exchange Commission.

Under the amendment, the holders of 80% of the outstanding principal amount of the notes agreed not to exercise their default-related rights until the earliest of the failure of a specified percentage of noteholders to execute a restructuring and lock-up agreement by May 20; the occurrence of specified events under a revolving credit agreement lender forbearance agreement; and the occurrence of events under the forbearance agreement among Vertis Receivables II, LLC, Webcraft, LLC, Webcraft Chemicals, LLC, Enteron Group, LLC, Vertis Mailing, LLC, the company and General Electric Capital Corp.

As previously reported, the company decided to forego its April 1 interest payment on the 9¾% notes to preserve and enhance its near-term liquidity. The notes indenture gave the company 30 days to cure the interest payment default.

However, holders of 77% of the notes agreed not to exercise their rights related to the interest payment default.

Baltimore-based Vertis provides print advertising and marketing solutions.

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