Appleton Papers receives approval to amend 12½% notes

New York, May 26 - Appleton Papers Inc. (B3/B+) said it received the necessary consents from holders of its $199.958 million principal amount of 12½% senior subordinated notes due 2008 to amend the indentures.

By the consent deadline of 5 p.m. ET on May 25, the company had obtained consents from holders of 96.5% of the securities.

Appleton said it has executed a supplemental indenture but it will only become effective when the tender offer is completed and the notes purchased.

Appleton said on May 12 that it had begun a cash tender offer for all of its $199.958 million of 12½% notes and was also soliciting consents to proposed indenture changes.

Appleton set a consent deadline of 5 p.m. ET on May 25. It will set pricing for the issue on June 7 and said the offer will expire at midnight ET on June 9, with all deadlines subject to possible extension.

The company, an Appleton, Wis.-based maker of specialty paper and packaging products, plans to calculate the consideration that it will offer noteholders on the second business day before the expiration, using a formula based, in part, on a 100 basis point fixed spread over the yield to maturity of the designated reference security, the 1 7/8% U.S. Treasury note due Nov. 30, 2005, at 11 a.m. ET on the pricing date.

Holders who tender their notes by the consent deadline will receive a $30 per $1,000 principal amount consent payment as part of their total consideration, while holders tendering after the consent deadline will receive the basic purchase price, but no consent payment.

All holders who tender their notes will also be paid accrued interest up to, but not including, the date of payment for the notes.

Holders tendering their notes will be required to consent to the proposed indenture amendments, which will eliminate certain restrictive covenants and related provisions. Holders may not tender without also delivering consents and may not deliver consents without also tendering.

Any notes tendered and consents delivered at or before the consent deadline may not be withdrawn after that time.

The tender offer is conditioned on, among other things, Appleton's ability to obtain financing necessary to complete the tender offer and certain related transactions.

Bear, Stearns & Co. Inc. (call 877 696-BEAR) and UBS Securities LLC (call 888 722-9552 x4210 or 203 719-4210) are the dealer managers and solicitation agents. D.F. King & Co. Inc. is the information agent (banks and brokers call 212 269-5550; all others call 800 290-6427).

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