KP Tissue's Kruger arranges $165M note offering

An anonymous director reports KRUGER PRODUCTS ANNOUNCES PROPOSED SENIOR UNSECURED NOTES FINANCING KP Tissue Inc.'s Kruger Products Inc. (KPI) intends, subject to market and other conditions, to offer $165-million principal amount of senior unsecured notes by way of private placement. Interest on the notes will accrue from the issue date and will be payable semi-annually. The notes will be guaranteed by each of KPI's existing and future restricted subsidiaries, being the same guarantors as under KPI's syndicated credit agreement. In connection with the offering, Kruger Products SB Inc. (KPSB) would become a restricted subsidiary under KPI's senior credit facility, the indenture governing the notes and the indentures governing KPI's outstanding notes, which KPI believes will immediately improve the credit profile of the restricted group. KPI intends to use the net proceeds of the offering to finance the repayment in full of the borrowings outstanding under KPSB's senior credit facilities and for general corporate purposes. KPI has obtained all required third party consents for the contemplated offering. About KP Tissue Inc. KP Tissue was created to acquire, and its business is limited to holding, a limited equity interest in KPI, which is accounted for as an investment on the equity basis. KP Tissue currently holds a 12.1-per-cent interest in KPI. About Kruger Products Inc. KPI is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. KPI serves the Canadian consumer market with such well-known brands as Cashmere, Purex, SpongeTowels, Scotties, White Swan and Bonterra. In the United States, KPI manufactures the White Cloud brand as well as many private label products. The away-from-home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. KPI has approximately 3,000 employees and operates 10 FSC CoC-certified (Forest Stewardship Council chain of custody) (FSC C-104904) production facilities in North America. We seek Safe Harbor.