Vertis, American Color Graphics to exchange four series of notes

By Jennifer Chiou

New York, Sept. 14 - Vertis, Inc. entered into an agreement with some holders of its 9¾% senior secured second-lien notes due 2009, 10 7/8% senior notes due 2009 and 13½% senior subordinated notes due 2009 and American Color Graphics Inc.'s 10% senior second secured notes due 2010, according to an 8-K filing with the Securities and Exchange Commission.

Under the agreement, the holders have agreed to participate in exchange for offers to extend the maturities of all of the notes series and to convert the 10% notes into a new series of senior subordinated notes from Vertis.

By tendering their existing notes, holders will also be consenting to certain amendments to the indentures to eliminate substantially all of the covenants and events of default.

In the case of the 10% notes, the amendments will eliminate the requirement that American Color Graphics offer to redeem the notes upon a change of control.

The companies are seeking consents from holders of a majority of notes.

The exchange offers will also provide for a second lien to the holders of notes exchanged for the 9¾% notes, a third lien to holders of the notes exchanged for the 10 7/8% notes as well as a fourth lien to the holders of the notes exchanged for the 10% notes and the 13½% notes.

The companies previously agreed to extend the time for the companies to sign a definitive merger agreement until Aug. 20. Vertis and American Color Graphics signed a letter of intent to merge on July 23.

American Color Graphics is a full-service premedia and print company with eight print locations. The company is based in Brentwood, Tenn.

Vertis, which does business as Vertis Communications, provides print advertising and marketing solutions to retail and consumer services companies. The company is based in Baltimore and has more than 100 U.S. locations.

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