DOMTAR ANNOUNCES REDEMPTION OF CERTAIN OUTSTANDING NOTES

Oct 19, 2010, 08:00 ET from DOMTAR CORPORATION

TICKER SYMBOL
UFS (NYSE, TSX)

MONTREAL, Oct. 19 /PRNewswire/ - Domtar Corporation (NYSE/TSX: UFS) today announced that it will redeem approximately US$135 million in aggregate principal amount of its 7.875% Notes due 2011, representing all of the notes outstanding of this series.

The notes will be redeemed at a redemption price of 100 percent of the principal amount, plus accrued and unpaid interest, as well as a make-whole premium. The accrued interest will be paid for the period from October 15, 2010 up to, but excluding, the redemption date of November 19, 2010. The make-whole premium will be calculated three days prior to redemption in accordance with the terms of the indenture governing the notes.

The terms of the redemption are described in the notice of redemption to be sent to registered holders on or about October 19, 2010.

Notes are to be surrendered to The Bank of New York Mellon, as trustee and paying agent, in exchange for the payment of the redemption price. Holders, who hold their notes through The Depository Trust Company, or DTC, will receive payment through DTC.

About Domtar Domtar Corporation (NYSE/TSX: UFS) is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade, fluff and specialty pulp. The Company designs, manufactures, markets and distributes a wide range of business, commercial printing and publishing as well as converting and specialty papers including recognized brands such as Cougar®, Lynx® Opaque Ultra, Husky® Opaque Offset, First Choice® and Domtar EarthChoice® Office Paper, part of a family of environmentally and socially responsible papers. Domtar owns and operates Domtar Distribution Group, an extensive network of strategically located paper distribution facilities. The Company employs over 8,700 people. To learn more, visit href="http://www.domtar.com/">www.domtar.com.

Forward-Looking Statements All statements in this press release that are not based on historical fact are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Forward-Looking Statements" and "Risk Factors" of the latest Annual Report on Form 10-K filed with the SEC as updated by the Company's latest Quarterly Report on Form 10-Q. Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances.

SOURCE DOMTAR CORPORATION