Mercer International uses interest grace period amid recapitalisation talks with noteholders

Mercer International is reportedly considering a possible Chapter 11 filing while negotiating a recapitalisation with holders of more than 75% of its 2028 and 2029 notes. The company has also used a 30-day grace period on approximately USD 25.8m of interest due 1 October 2026 on its 12.875% senior notes maturing 2028. Mercer says any agreement, its timing and terms remain uncertain, and that operations and supplier payments continue as normal.

Why this mattersA recapitalisation cutting funded debt would impose losses or dilution on Mercer's noteholders and set a reference point for lenders to other leveraged pulp producers.

• Mercer confirmed advanced recapitalisation talks with holders of more than 75% of combined 2028 and 2029 notes principal
• Company used 30-day grace period on approximately USD 25.8m of interest due 1 October 2026 on 12.875% senior notes maturing 2028
• Proposed transaction would combine new capital with a substantial reduction in funded debt and interest expense
• Use of the grace period does not itself constitute an event of default under the indenture
• Pulp, lumber and mass timber operations and payments to suppliers, contractors and employees continue as normal
• Mercer's confirmed regulatory disclosure did not announce a Chapter 11 filing

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