Verso Paper Holdings LLC Issue-Level Ratings Lowered To #D# On Bankruptcy Filing Announcement

Stocks and Financial Services Press Releases Wednesday January 27, 2016 09:20
NEW YORK--27 Jan--Standard & Poor's

NEW YORK (Standard & Poor's) Jan. 26, 2016--Standard & Poor's Ratings Servicessaid today it lowered its issue-level ratings on Verso Paper Holdings LLC'ssenior secured ABL facility and senior secured cash flow revolving creditfacility to 'D' from 'CC'. At the same time, we lowered our ratings on thecompany's second priority senior secured notes and senior subordinated notesto 'D' from 'C', both of which are guaranteed by subsidiary Verso Corp. As aresult of these actions, all issue-level ratings for Verso Paper Holdings LLCand its subsidiaries are now 'D'.

The rating action follows Verso's announcement that it has filed voluntarypetitions for restructuring under Chapter 11 of the U.S. Bankruptcy Code. Thecompany communicated in its announcement that it is working with a group ofits creditors that hold the majority in principal of most classes of itsoutstanding debt on a restructuring plan that would seek to reduce debt by$2.4 billion. Verso also stated that it expects to secure adebtor-in-possession (DIP) facility of $600 million to provide liquidity forongoing operations while the restructuring is finalized.

On Jan. 22, 2016, Standard & Poor's lowered its corporate credit rating on thecompany and certain issue-level ratings to 'D' after Verso announced that itwould exercise a grace period for interest payments relating to its seniorsecured notes, as well as the term loan issued by subsidiary NewPage Corp.Subsequent to today's rating action, all issue-level ratings for Verso and itsrated subsidiaries are 'D'. As of Sept. 30, 2015, the company's adjusted debtwas $3 billion (including $114 million in adjustments of for operating leases,asset retirement obligations, accrued interest, and pension and otherpostemployment benefit obligations).


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