Mercer International Inc.: defers $25,800,000 interest payment

What happened The filing reports that a special committee of independent directors of Mercer International Inc., together with the company’s advisors, is in advanced discussions with an ad hoc group of holders of the company’s 12.875% Senior Notes due 2028 and 5.125% Senior Notes due 2029 (members of the Ad Hoc Group hold greater than 75% of the aggregate outstanding principal amount of the Notes) regarding the principal terms of a comprehensive recapitalization transaction and a significant capital infusion. The company said the Transaction is intended to address upcoming debt maturities, enhance liquidity and strengthen its balance sheet through a meaningful reduction in funded debt and associated interest expense. In light of ongoing negotiations, the company elected not to make the approximately $25,800,000 interest payment due Oct 1, 2026 on the 2028 Notes and instead will utilize the 30-day grace period under the indenture; the filing states that use of the grace period does not constitute an event of default. The filing also states that the company’s pulp, lumber and mass timber operations continue to run in the ordinary course and that it continues to serve customers and pay suppliers, contractors and employees in the ordinary course.

Key details

• Negotiations are with an ad hoc group holding greater than 75% of the aggregate outstanding principal amount of the Notes.
• Notes involved: 12.875% Senior Notes due 2028 and 5.125% Senior Notes due 2029.
• The company did not make the approximately $25,800,000 interest payment due Oct 1, 2026 on the 2028 Notes and elected to use the 30-day grace period under the indenture.
• The filing states operations and customer, supplier and employee relationships continue in the ordinary course.

Why it may matter Item reported: Item 7.01, Regulation FD disclosure, which covers the company’s disclosure of its discussions with holders of the Notes and its election to use the indenture’s 30-day grace period for the Oct 1, 2026 interest payment. This filing does not show why the company acted.