Mercer International Inc. Announces Upsizing and Pricing of Private Offering of Senior Notes and the Conditional Full Redemption of Its Outstanding 7.375% Senior Notes Due 2025

Rhea-AI Summary

Mercer International Inc. (Nasdaq: MERC) has announced an upsized private offering of $875 million in 5.125% senior notes due February 1, 2029, an increase from the previously planned $500 million. The funds will refinance $250 million of 6.500% senior notes due 2024 and redeem $550 million of 7.375% senior notes due 2025. Redemption of the 2025 Notes is set for January 26, 2021, conditional upon completion of the offering. The offering is aimed at qualified institutional buyers and is structured under Rule 144A. The anticipated closing date is also January 26, 2021.

Positive

• Upsized offering to $875 million, indicating strong demand.
• Refinancing of higher interest debt (6.500% and 7.375% notes) potentially reduces interest expenses.
• General corporate purposes may enhance operational flexibility.

Negative

• The substantial debt offering raises concerns about increased leverage.
• Conditional redemption may indicate cash flow concerns or liquidity issues.

NEW YORK, Jan. 14, 2021 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) (the "Company") today announced the upsizing and pricing of its private offering of $875 million in aggregate principal amount of 5.125% senior notes due February 1, 2029 (the "2029 Notes"). The size of the offering was increased from the previously announced offering of $500 million aggregate principal amount of 2029 Notes to $875 million aggregate principal amount of 2029 Notes.

The 2029 Notes are being issued at a price of 100% of their principal amount. The net proceeds of the offering will be used by the Company to refinance all $250 million in aggregate principal amount of its 6.500% Senior Notes due 2024 (the "2024 Notes") pursuant to its previously announced tender offer for, or any subsequent redemption of, its 2024 Notes, to redeem all of its 7.375% Senior Notes due 2025 (the "2025 Notes") and for general corporate purposes.

In connection with the proposed conditional redemption of the 2025 Notes, the Company has issued a conditional notice of redemption to redeem in full all $550 million in aggregate principal amount of the 2025 Notes at $1,036.88 per $1,000.00 of principal amount redeemed, plus accrued and unpaid interest to, but not including, the redemption date. The redemption date is January 26, 2021 and redemption is conditioned upon completion of the Offering and the Company's deposit with the paying agent of sufficient funds to pay the redemption price.

The offering of the 2029 Notes is expected to close on or around January 26, 2021, subject to the satisfaction of customary closing conditions.

The 2029 Notes are being offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act.

The 2029 Notes have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2029 Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

Mercer International Inc. is a global forest products company with operations in Germany and Canada with consolidated annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber. To obtain further information on the company, please visit its web site at https://www.mercerint.com.

The preceding contains "forward looking statements" within the meaning of federal securities laws and is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, without limitation, the Company's intentions regarding the consummation of the offering of the 2029 Notes and the intended use of proceeds and the completion of the refinancing of the 2024 Notes and redemption of the 2025 Notes. "Forward looking statements" involve unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. These statements are based on the Company's management's estimates and assumptions with respect to future events, which include uncertainty as to its ability to consummate the offering of the 2029 Notes or the refinancing of the 2024 Notes and redemption of the 2025 Notes, which estimates are believed to be reasonable, though inherently uncertain and difficult to predict. A discussion of factors that could cause actual results to vary is included in the Company's Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.

APPROVED BY:

Jimmy S.H. Lee
Executive Chairman
(604) 684-1099

David M. Gandossi, FCPA, FCA
Chief Executive Officer
(604) 684-1099

FAQ

What is the purpose of the $875 million offering by Mercer International (MERC)?

The offering will refinance existing higher interest senior notes and for general corporate purposes.

How does Mercer International (MERC) plan to use the proceeds from the 2029 Notes?

Proceeds will be used to refinance $250 million 6.500% notes due 2024 and redeem $550 million 7.375% notes due 2025.

When is the redemption date for the 2025 Notes issued by Mercer International (MERC)?

The redemption date for the 2025 Notes is January 26, 2021.

What interest rate is associated with the new 2029 Notes from Mercer International (MERC)?

The new 2029 Notes have an interest rate of 5.125%.

What regulatory framework is Mercer International (MERC) utilizing for its offering?

The offering is being made in reliance on Rule 144A and Regulation S under the Securities Act.