Georgia-Pacific receives consents to amend $2.4 billion notes, debentures

New York, Dec. 2 - Georgia-Pacific Corp. said it received the necessary consents to amend $2.4 billion of debt securities issued by itself and its Fort James Corp. subsidiary.

The company has executed a supplemental indenture - which will only become effective when it buys the notes as part of the completion of the upcoming acquisition of Georgia-Pacific by Koch Forest Products, Inc. - and a waiver of the need for a change-of-control offer, which goes into force immediately.

The response by the consent deadline was as follows:

• $350 million of 7 3/8% senior notes due 2008: $347.41 million or 99.26% tendered;

• $700 million of 8 7/8% senior notes due 2010: $697.345 million or 99.62% tendered;

• $775 million of 9 3/8% senior notes due 2013: $766.423 million or 98.89% tendered;

• $150 million of 8% senior notes due 2014: $77.013 or 51.34% tendered;

• $300 million of 6 7/8% senior notes due 2007: $279.351 million or 93.12% tendered;

• $30.715 million of 9¼% debentures due 2021: $29.953 million or 97.52% tendered; and

• $88 million of 7¾% debentures due 2023: $83.466 million or 94.85% tendered.

Georgia-Pacific began the tender on Nov. 17 and said it was also soliciting consents to eliminate restrictive covenants in the securities' indentures.

The offers expire at 5 p.m. ET on Dec. 30, unless extended.

The tenders are part of the recently announced acquisition of Georgia-Pacific by Koch Forest Products, Inc., an indirect wholly owned subsidiary of Koch Industries, Inc.

The offers are conditioned upon completion of the merger after Koch Forest Products' tender offer for Georgia-Pacific's shares. Koch Forest Products will use the proceeds of merger financing facilities to fund the tenders.

For each $1,000 principal amount of notes, Georgia-Pacific will pay the present value on the notes' earliest redemption date, discounted using: the yield to maturity of the 3¼% Treasury due Aug. 15, 2008 and 50 basis points for the 7 3/8% senior notes due 2008; the yield to maturity of the 6½% Treasury due Feb. 15, 2010 and 50 bps for the 8 7/8% senior notes due 2010; the yield to maturity of the 5½% Treasury due Feb. 15, 2008 and 50 bps for the 9 3/8% senior notes due 2013; and the yield to maturity of the 3¼% Treasury due Jan. 15, 2009 and 50 bps for the 8% senior notes due 2014.

For each $1,000 principal amount of notes, Fort James will pay the present value on the notes' earliest redemption date, discounted using: the yield to maturity of the 4% Treasury due Aug. 31, 2007 and 30 bps for the 6 7/8% senior notes due 2007; the yield to maturity of the 5 3/8% Treasury due Feb. 15, 2031 and 75 bps for the 9¼% debentures due 2021; and the yield to maturity of the 5 3/8% Treasury due Feb. 15, 2031 and 75 bps for the 7¾% debentures due 2021.

Pricing will be calculated at 2 p.m. ET on Dec. 16.

The payouts include a $20.00 per $1,000 principal amount of notes consent payment for those who tender their holdings before 5 p.m. ET on Dec. 1, the consent date.

Citigroup Corporate and Investment Banking (800 558-3745) and Goldman, Sachs & Co. (800 828-3182 or call collect 212 357-3019) are the dealer managers and solicitation agents.

Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 952-2200).

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

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