MERCER INTERNATIONAL INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In
thousands of U.S. dollars, except share and per share data)
Note 5. Debt (continued)
Certain of the Companys debt instruments were issued under agreements which, among
other things, may limit the ability to make certain payments, including dividends. These limitations are subject to specific exceptions. As at March 31, 2019, the Company was in compliance with the terms of its debt agreements.
(a)
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In 2018, the Company issued $350,000 in aggregate principal amount of 7.375% senior notes which mature on
January 15, 2025 (2025 Senior Notes). The 2025 Senior Notes were issued at a price of 100% of their principal amount. The net proceeds of the offerings were $342,682 after deducting the underwriters discount and offering
expenses. The net proceeds, together with cash on hand, were used to finance the acquisition of MPR.
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In
2017, the Company issued $300,000 in aggregate principal amount of 5.50% senior notes which mature on January 15, 2026 (2026 Senior Notes). The 2026 Senior Notes were issued at a price of 100% of their principal amount. The net
proceeds of the offering were $293,795, after deducting the underwriters discount and offering expenses.
In 2018,
the Company used the net proceeds of the 2026 Senior Notes, together with cash on hand, to purchase $300,000 in aggregate principal amount of 2022 Senior Notes (herein defined below). In connection with this redemption the Company recorded a loss on
settlement of debt of $21,515 in the Interim Consolidated Statement of Operations.
In 2017, the Company issued $250,000 in
aggregate principal amount of 6.50% senior notes which mature on February 1, 2024 (2024 Senior Notes). The 2024 Senior Notes were issued at a price of 100% of their principal amount. The net proceeds of the offerings were $244,711,
after deducting the underwriters discount and offering expenses. The net proceeds, together with cash on hand, were used to redeem $227,000 of remaining aggregate principal amount of outstanding senior notes due 2019, to finance the
acquisition of the Friesau sawmill and for general working capital purposes.
In 2014, the Company issued $400,000 in
aggregate principal amount of 7.75% senior notes which mature on December 1, 2022 (2022 Senior Notes and collectively with the 2024 Senior Notes, 2025 Senior Notes and 2026 Senior Notes, the Senior Notes).
The Senior Notes are general unsecured senior obligations of the Company. They rank equal in right of payment with all existing
and future unsecured senior indebtedness of the Company and are senior in right of payment to any current or future subordinated indebtedness of the Company. The Senior Notes are effectively junior in right of payment to all existing and future
secured indebtedness, to the extent of the assets securing such indebtedness, and all indebtedness and liabilities of the Companys subsidiaries.
The Company may redeem all or a part of the 2025 Senior Notes or 2026 Senior Notes, upon not less than 10 days or more
than 60 days notice and the Company may redeem all or a part of the 2024 Senior Notes or 2022 Senior Notes, upon not less than 30 days or more than 60 days notice at the redemption price plus accrued and unpaid interest to (but not
including) the applicable redemption date.
FORM 10-Q
QUARTERLY REPORT - PAGE 10