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Resolute Forest Products to raise US$600 million to repay other debt

MONTREAL – Resolute Forest Products Inc. (TSX:RFP) said Wednesday it has made a private offering of US$600 million in senior notes due 2023 that will be used to repay other debt.

The money raised will be used to repay the company’s $501.2 million senior secured notes due 2018, which pay 10.25 per cent interest annually. The company is offering to pay $1,166.94 per $1,000 of principal in the 2018 notes.

At the same time, Resolute is asking holders of the 2018 notes to amend the terms of the securities to remove most of their restrictive covenants and release all collateral pledged to secure the obligations.

The new 2023 notes will be unsecured but payments will be guaranteed by Resolute’s U.S. subsidiaries, the company said. It didn’t announce the interest rate to be paid on the new notes.

Resolute, formerly known as AbitibiBowater, produces newsprint, commercial printing papers, pulp and wood products.

The company underwent a court-supervised restructuring which it completed in December 2010 that saw it cut costs and reduce its debt from $6.8 billion to $850 million.