Verso amends exchange offer, bonds jump; Energy Future scuttles plan, debt trades upward

By Stephanie N. Rotondo

Phoenix, July 24 – Verso Paper Corp.’s debt was a big winner in Thursday’s distressed debt market.

The papermaker’s bonds were up 10 to 15 points on the day, as the company amended an exchange offer for its second-lien and subordinated notes. Each offer must meet a minimum tender condition in order for the company to move forward with its proposed merger with NewPage Corp.

As of the early tender deadline, the participation level for the subordinated notes was well below 70%.

Verso Paper announced Thursday that it had amended its exchange offer for its 11 3/8% senior subordinated notes due 2016.

The exchange is being done in connection with the company’s merger with NewPage. The company is also looking to exchange its 8¾% notes due 2019.

In order to meet its threshold, Verso said Thursday that it was giving the 8¾% noteholders until July 30 to tender their holdings at the same consideration given to those who participated by the early deadline, and it extended the exchange offer for the 11 3/8% notes to Aug. 6 from July 30.

Meanwhile, Energy Future Holdings Corp. paper was mostly firm on the back of news the company had scrapped a restructuring support agreement inked prior to the company filing bankruptcy.

The news was not unexpected, however. It was reported late last week that such an action was possible – and likely – if talks with one group of creditors did not go as well as hoped.

© 2015 Prospect News.
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