Verso amends second-lien notes, subordinated notes with close of NewPage acquisition

By Jennifer Chiou

New York, Jan. 7 – Verso Corp., formerly Verso Paper Corp., announced adjustments and amendments to its debt securities following the completion of its $1.4 billion acquisition of NewPage Holdings Inc.

According to a news release, the transaction was originally announced on Jan. 6, 2014.

The company said that its name change symbolizes Verso's intention to broaden its business platform and seek alternative revenue streams to augment its core printing papers, specialty papers and pulp segments.

As a result of the acquisition, the provisions of the adjustable second-lien notes and subordinated notes issued by Verso Paper Holdings LLC and Verso Paper Inc. were adjusted.

Specifically, the principal amount of the second-lien notes has been adjusted so that a holder of $1,000 principal amount of notes immediately prior to the acquisition now will hold $593.75 principal amount. The maturity date has been extended to Aug. 1, 2020 from Feb. 1, 2019.

In addition, the interest rate for the second-lien notes has been adjusted so that the notes bear interest from the acquisition date at a rate of 10% per year, payable entirely in cash, plus 3% per year payable in kind.

As a result of the principal adjustment, the outstanding principal amount of the second-lien notes was reduced to about $177.7 million from about $299.4 million.

For the subordinated notes, the principal amount of notes has been adjusted so that a holder of $1,000 principal amount of notes prior to the acquisition now will hold $620 principal amount of notes. The maturity date has been extended to Aug. 1, 2020 from Aug. 1, 2016.

The subordinated notes’ interest rate has been adjusted to 11% per year, payable entirely in cash, plus 5% per year payable in kind.

As a result of the principal adjustment, the outstanding principal amount of the subordinated notes was reduced to about $63.2 million from about $102 million.

Any adjusted notes that do not bear an authorized denomination will be rounded down for any series, the company said.

Memphis-based Verso produces coated papers. NewPage was a Miamisburg, Ohio-based producer of printing and specialty papers.

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