Mercer International defers USD 25.8m coupon, negotiates recapitalisation with bondholder group

Mercer International has deferred an interest payment of about USD 25.8m due 1 October 2026 on its 12.875% Senior Notes due 2028, invoking a 30-day grace period under the indenture. The pulp and lumber producer is in advanced talks with an ad hoc group holding more than 75% of the outstanding principal of both the 2028 notes and its 5.125% Senior Notes due 2029 on a comprehensive recapitalisation to cut funded debt and interest expense. Mercer says no definitive agreement has been reached and operations continue as normal.

Why this mattersA deferred coupon and talks with holders of more than 75% of two bond issues point to a balance-sheet restructuring at a significant market pulp supplier.

• Mercer deferred approximately USD 25.8m of interest due 1 October 2026 on its 12.875% Senior Notes maturing 2028.
• The company is using a 30-day grace period under the indenture and says this does not constitute an event of default.
• An ad hoc group holds more than 75% of the aggregate outstanding principal of the 2028 notes and the 5.125% Senior Notes due 2029.
• Talks aim at a recapitalisation to reduce funded debt and interest expense, address maturities and improve liquidity.
• A special committee of independent directors is leading the talks; the 8-K was signed by CFO Richard Short.
• Mercer says its pulp, lumber and mass timber operations continue normally, with customers, suppliers and employees served and paid as usual.

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