Vertis expects to amend offers for 13½%, 18½% notes, extends deadline

By Angela McDaniels

Tacoma, Wash., Nov. 1 - Vertis Holdings, Inc. operating subsidiary Vertis, Inc. extended the private tender offers, exchange offers and consent solicitations for its 13½% senior pay-in-kind notes and its 18½% senior secured second-lien notes due 2012 to 5 p.m. ET on Nov. 5 from Oct. 29.

The company said it expects to make changes to the offers, including to the payments being offered, and that holders will likely be required to re-tender their notes if they want to participate in the amended offer.

As of 5 p.m. ET on Oct. 29, $198.6 million principal amount, or 77%, of the 13½% notes had been tendered with consents and $373.7 million principal amount, or 90%, of the 18½% notes had been tendered with consents.

As of 5 p.m. ET on Sept. 30, holders had tendered and delivered consents for $186.2 million, or 77%, of the 13½% notes and $350.8 million, or 92.2%, of the 18½% notes.

The offers began on April 16, 2010 and have been extended multiple times.

Among other conditions, the company needs tenders from holders of at least 95% of each notes series.

13½% notes offers

Vertis is offering to exchange 2,022.866 shares of its common stock for each $1,000 principal amount of 13½% notes.

The exchange is only open to qualified institutional buyers or accredited investors.

The company is also tendering for the notes that are not eligible for the exchange offer. It will pay $50 for each $1,000 principal amount of notes.

The company is also soliciting consents to amend the indenture to remove substantially all of the restrictive covenants and some events of default.

Vertis needs consents from holders of a majority of notes. It added that it will fund the offer from a private placement of shares to Avenue Capital Group.

The offer was amended on Aug. 19. Prior to the changes, the company was offering 784.377 for each $1,000 principal amount of notes in the exchange offer and $400 for each $1,000 principal amount of notes in the tender offer. It was also offering a consent fee of $5 per $1,000 principal amount of notes to those who delivered consent by April 28.

18½% exchange offer

Vertis is offering an equal amount of new 13% senior secured notes due 2016 in exchange for its 18½% notes.

Before amending the private offer in August, the company was offering to exchange $393.73 principal amount of the new notes and $591.27 of cash for each $1,000 principal amount of 18½% notes.

The company is also soliciting consents to amend the indenture to eliminate substantially all of the restrictive covenants and some events of default and related provisions. It needs consents from holders of at least 75% of the notes.

The offer is also subject to holders not affiliated with Avenue Capital tendering at least 15% of each series of notes.

The company said that the offers are part of a comprehensive $1.1 billion refinancing of substantially all of Vertis' outstanding secured and unsecured debt.

Bondholder Communications Group, LLC (212 809-2663) is the information and exchange agent.

Baltimore-based Vertis provides print advertising and marketing services.

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