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Verso Paper Corp. Announces Proposed $345 Million Debt Offering And Commitments From Lenders For New Credit Facilities

Stocks in this article: VRS

Verso Paper Corp. (NYSE:VRS) announced today that its subsidiaries, Verso Paper Holdings LLC and Verso Paper Inc. (the “Issuers”), propose to issue $345 million aggregate principal amount of senior secured notes due 2019 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Notes will be guaranteed by certain domestic subsidiaries of Verso.

Verso also announced today that it has received commitments from lenders for a new $150 million asset-based revolving loan facility and a new $50 million first-priority revolving facility. These commitments would be utilized in lieu of Verso's previously announced $100.0 million of commitments for an accounts receivable securitization facility and approximately $55.0 million of commitments to provide a new and/or extended revolving facility under Verso Holdings’ existing senior secured revolving credit facility.

Verso intends to enter into the new credit facilities as soon as practicable following the completion of the Notes offering and upon satisfaction of customary conditions. While Verso has received commitments from lenders for the proposed new credit facilities, there can be no assurance that Verso will enter into such facilities. The new credit facilities will replace Verso’s existing $200 million revolving credit facility which matures on August 1, 2012.

Verso’s subsidiaries that intend to issue and guarantee the Notes are the same entities that issued and guaranteed Verso’s existing senior secured notes. The Notes will be secured by first priority security interests in the “Notes Priority Collateral” (which generally includes most fixed assets of the Issuers and the guarantors) and by second priority security interests in the “ABL Priority Collateral” (which generally includes most inventory and accounts receivable of the Issuers and the guarantors), in each case subject to certain permitted liens and as described in the offering circular relating to the Notes.

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