Buckeye To Redeem $25 Million Of Notes

March 22, 2010 (FinancialWire) — Buckeye Technologies Inc. (NYSE: BKI) said that it is calling for redemption prior to their maturity $25 million in aggregate principal amount of its outstanding 8.5% senior notes due 2013 at a redemption price of 102.833% of their principal amount in accordance with the notes’ terms.

Buckeye will redeem these notes on April 19, 2010. Upon completion of this redemption, $140 million of the 2013 notes will remain outstanding.

The company said it plans to finance this redemption using drawings from its revolving credit facility. As of March 20, Buckeye said it had around $84 million of availability on its revolving credit facility and a cash balance of around $28 million.

This redemption is expected by Buckeye to result in a one-time charge for early extinguishment of debt in Buckeye’s fiscal fourth quarter of $1.2 million (of which $0.5 million is a non-cash charge), or about two cents per share. The company said it expects to realize annualized interest savings of around $1.7 million assuming variable interest rates remain close to current levels.

Tennessee-based Buckeye is a manufacturer and marketer of specialty fibers and nonwoven materials. The company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.

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