Appleton Papers launches private exchange offers for 8 1/8%, 9¾% notes

By Angela McDaniels

Tacoma, Wash., Aug. 18 - Appleton Papers Inc. has begun private offers to exchange its 8 1/8% senior notes due 2011 and 9¾% senior subordinated notes due 2014 for new 11¼% second-lien notes due 2015, according to a company news release.

The company is also soliciting consents to amend the indentures governing the old notes to eliminate some provisions, including substantially all of the restrictive covenants, to eliminate some events of default and to eliminate or modify related provisions.

Holders who tender will be deemed to have consented to the proposed amendments, and holders may not deliver consents without tendering their notes.

The company is offering $1,000 principal amount of new notes for each $1,000 principal amount of 8 1/8% notes plus an additional $10 principal amount of new notes for notes tendered by the consent date.

For the 9¾% notes, the company is offering $600 principal amount of new notes for each $1,000 principal amount of old notes plus an additional $25 principal amount of new notes for notes tendered by the consent date.

The exchange offers will expire at midnight ET on Sept. 15, and the consent date is 5 p.m. ET on Aug. 31.

Appleton said it has entered into agreements with holders of about 66.0% of the 8 1/8% notes and approximately 67.3% of the 9¾% notes under which the holders have agreed to tender their old notes.

The exchange offers and consent solicitations are subject to some conditions, including the receipt of consent from the lenders under Appleton's senior secured credit facility to the exchange offers and to the granting of liens to secure Appleton's obligations under the new notes and minimum tender conditions of 80% for the 8 1/8% notes and 70% for the 9¾% notes.

The new notes will be senior obligations of Appleton, secured by a second-priority security interest in the assets currently securing Appleton's senior secured credit facilities, subject to some exceptions, and guaranteed by Paperweight Development Corp. and some of its direct and indirect subsidiaries that guarantee Appleton's obligations under its senior secured credit facilities.

The exchange offers and consent solicitations are being made only to qualified institutional buyers and accredited investors inside the United States and to some non-U.S. investors located outside the United States who have completed a related letter of representations.

Appleton Papers is a paper manufacturing company based in Appleton, Wis.

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