Verso Explores Options After Debt Exchange Terminated

Verso Paper Corp., a maker of coated paper used in magazines, said it’s exploring “all options” after failing to complete debt exchange offers related to its $907 million acquisition of NewPage Holdings Inc.

Verso last month began an offer to exchange new securities for its subordinated notes and $396 million of second-lien debt. The minimum tender conditions weren’t satisfied and the offers expired yesterday, Memphis, Tennessee-based Verso Paper said in a statement today.

The company said that parties claiming to hold about 31 percent of the 8.75 percent, second-lien debt due in 2019 sought improved terms. Verso said that while it considered changes to the exchange offer, including an improved exchange ratio and a higher coupon on the new notes, the group of noteholders “demonstrated an unwillingness to engage in constructive dialogue.”

NewPage, a closely held specialty paper company, said Feb. 20 it rejected a request by Verso to waive or amend the condition requiring the debt exchange offer to be completed before the takeover can proceed. In agreeing to be acquired, NewPage’s board gave “great weight” to the debt reduction that would result from the exchange offer, the Miamisburg, Ohio-based company’s Chairman Mark Angelson said in a Feb. 20 letter to Verso.

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