Montreal, Quebec, Canada, 04 October 2010 -- /PRNewswire/ -- AbitibiBowater Inc. announced today the closing of the sale of CAD 850 million aggregate principal amount of 10.25% senior secured notes due 2018 in a private placement under Rule 144A and Regulation S (the notes offering).
The notes were issued by ABI Escrow Corporation, a wholly owned subsidiary of AbitibiBowater. ABI Escrow Corporation will merge with and into AbitibiBowater in connection with AbitibiBowater's and its subsidiaries' emergence from creditor protection, which is expected to occur this fall, subject to confirmation of its U.S. plan of reorganization.
Proceeds of the notes offering have been placed in escrow until the effectiveness of the plans of reorganization. The net proceeds from the sale of the notes will be used upon emergence to repay certain existing debt.
Following emergence, the notes will be senior secured obligations of AbitibiBowater, will be guaranteed by AbitibiBowater's material U.S. wholly-owned subsidiaries, and will be secured by substantially all the U.S. assets of AbitibiBowater and the guarantors and the stock of certain subsidiaries.
The notes have not been and will not be registered under the Securities Act or any state securities laws. Further, the notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements and, therefore, will be subject to substantial restrictions on transfer. The offering is being made only to qualified institutional buyers inside the United States and to certain non-U.S. investors located outside the United States.