Clearwater Paper gets tenders for nearly all Cellu Tissue 11½% notes

By Susanna Moon

Chicago, Dec. 27 - Clearwater Paper Corp. said investors tendered $234,479,000 principal amount, or 99.99%, of Cellu Tissue Holdings, Inc.'s $234,484,000 of 11½% senior secured notes due 2014.

The tender offer expired at 11 a.m. ET on Dec. 27. Settlement occurred later that day.

The tender offer was made in connection with Clearwater's acquisition of Cellu Tissue for $12.00 per share in cash, or a total of about $530 million including equity value of about $247 million, retired debt of about $267 million and assumed debt of about $16 million. The purchase was funded using cash on hand and $375 million of debt financing.

Holders received $1,160.71 per $1,000 principal amount of notes. The amount includes an early tender payment of $30.00 for notes tendered by the early tender date, which was 5 p.m. ET on Nov. 30.

The company also paid accrued interest up to but excluding the payment date.

The purchase price was set at 2 p.m. ET on Dec. 13 using the yield of the 0.875% Treasury due May 31, 2011 plus a fixed spread of 50 basis points. The reference yield was 0.197%.

As of 5 p.m. ET on Dec. 10, holders had tendered $234,366,000 principal amount, or 99.95%, of the notes.

The notes are callable at 111.5 on June 1.

The tender offer began Nov. 9 and was conditioned on the closing of the merger.

The dealer manager was Bank of America Merrill Lynch (attn: debt advisory services at 980 388-9217 or 888 292-0070). The information agent is D.F. King & Co., Inc. (800 431-9643).

Clearwater is a Spokane, Wash.-based manufacturer of consumer tissue, bleached paperboard and wood products. Cellu Tissue is an Alpharetta, Ga.-based manufacturer of tissue products.

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