Ainsworth announces exchange offer for up to $596 million of notes

By Laura Lutz

Des Moines, Feb. 15 - Ainsworth Lumber Co. Ltd. launched an exchange offer for up to $596 million of its outstanding notes in five series, according to a news release.

Under the offer, holders of the existing notes may exchange them for 14% senior secured second-lien notes due June 24, 2014, which will be issued in a total principal amount of up to $596 million.

The offer applies to $153.5 million of senior unsecured floating-rate notes due 2010, $275 million of 7¼% senior unsecured notes due 2012, $75 million of senior unsecured floating-rate notes due 2013, $210 million of 6¾% senior unsecured notes due 2014 and $110 million of 6¾% senior unsecured notes due 2014.

Ainsworth is also soliciting consents to amend the indentures governing the existing notes. Those amendments would remove substantially all of the restrictive covenants and some events of default.

Settlement of the offer depends on receipt of consents from holders of at least 50.1% of the existing notes and from holders of at least a majority of each class of existing notes.

Ainsworth said that holders of about one-third of its existing notes have already agreed to tender their notes and deliver consents.

The exchange offer is scheduled to expire at midnight ET on March 14. Holders who tender by Feb. 29, the consent deadline, will also receive a consent fee of $50 per $1,000 principal amount of notes.

Barclays Capital Inc. is the financial adviser, and Global Bondholder Services Corp. is the exchange agent and information agent.

Ainsworth is a Vancouver, B.C.-based forest products company.

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