Domtar Corporation announces expiration of tender offer for certain outstanding notes

Jun 21, 2010, 08:30 ET from DOMTAR CORPORATION


(All financial information is in U.S. dollars unless otherwise noted.)

MONTREAL, June 21 /PRNewswire-FirstCall/ - Domtar Corporation (NYSE/TSX: UFS) today announced that its tender offer for its outstanding 5.375% Notes due 2013 (the "First Priority Notes"), 7 1/8% Notes due 2015 (the "Second Priority Notes"), 7.875% Notes due 2011 (the "Third Priority Notes") and 10.75% Notes due 2017 (the "Fourth Priority Notes" and together with the First Priority Notes, Second Priority Notes and Third Priority Notes, the "Notes") expired at 12:00 midnight, New York City time, on Friday, June 18, 2010 (the "Expiration Time").

The aggregate principal amount of each series of Notes that has been validly tendered and the aggregate principal amount of each series of Notes that has been accepted for purchase by the Company are set forth in the table below. In accordance with the terms of the tender offer, the Company has accepted for purchase all $238,271,000 of the validly tendered First Priority Notes (representing 76.75% of the First Priority Notes outstanding prior to the tender offer). Because the aggregate principal amount of Notes validly tendered has exceeded the maximum payment amount of $450 million, the Company has accepted for purchase $186,922,000 of the validly tendered Second Priority Notes (representing 46.76% of the Second Priority Notes outstanding prior to the tender offer) on a pro rata basis among tendering holders using a proration factor of 74.971722%. The Company will not accept for purchase any Third Priority Notes or Fourth Priority Notes and such Notes will be returned to holders. The Company expects to make payment for the notes accepted for purchase (other than the First Priority Notes accepted for payment on the early payment date of June 4, 2010) today, Monday, June 21, 2010.

    CUSIP   Title of  Accep- Aggregate    Aggregate   Percentage  Aggregate
    Number  Security  tance  Principal    Principal   of          Principal
                      Prio-  Amount       Amount      Outstanding Amount
                      rity   Outstanding  Tendered    Notes       Accepted
                      Level                           Tendered    for
    257559  5.375%    1     $310,431,000  $238,271,000  76.75%  $238,271,000
    AB0     Notes
    257559  7 1/8%    2     $399,723,000  $249,395,000  62.39%  $186,922,000
    AC8     Notes
    257559  7.875%    3     $134,752,000   $34,300,000  25.45%  $0
    AA2     Notes
    257559  10.75%    4     $400,000,000  $149,778,000  37.44%  $0
    AG9     Notes

The complete terms and conditions of the tender offer are described in the Offer to Purchase, dated May 21, 2010, as previously amended, and the related letter of transmittal. Banc of America Securities LLC and Goldman, Sachs & Co. acted as dealer managers in connection with the tender offer. Questions regarding the tender offer may be directed to Banc of America at (646) 855-3401 (collect) or (888) 292-0070 (U.S. toll-free) or to Goldman Sachs at (212) 902-5183 (collect) or (800) 828-3182 (U.S. toll-free). Inquiries may also be directed to Global Bondholder Services Corporation, which served as the information agent and depositary for the tender offer, at (212) 430-3774 (for banks and brokers) or (866) 470-3700 (U.S. toll-free).

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(R), Lynx(R) Opaque Ultra, Husky(R) Opaque Offset, First Choice(R) and Domtar EarthChoice(R) 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. Domtar also produces lumber and other specialty and industrial wood products. The Company employs over 10,000 people. To learn more, visit

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.