July 17 (Bloomberg) -- Verso Paper Corp. failed to garner
enough interest from bondholders by an early deadline for a
debt-swap plan that may help the company acquire a rival and
avoid bankruptcy.

Less than 75 percent of the securities, which include
Verso’s $396 million of 8.75 percent second-lien bonds due
February 2019 and $142.5 million of 11.375 percent subordinated
notes due August 2016, were offered in the exchange, according
to a statement today.

Verso, owned by Leon Black’s Apollo Global Management LLC,
needs bondholders to agree to a debt-reducing exchange in order
to close a $1.4 billion deal to buy NewPage Holdings Inc. The
company has had trouble persuading creditors to take a smaller
stake in the equity of the new company than the 25 percent share
they proposed in February.

“We are disappointed that we have not yet reached the 75
percent minimum condition for the exchange offers,” Dave
Paterson, Verso’s chief executive officer, said today in the
statement.

The second-lien notes fell 2.4 cents on the dollar to 47.6
cents at 11:12 a.m. in New York to yield 31 percent, according
to Trace, the bond-price reporting system of the Financial
Industry Regulatory Authority.

Holders of the subordinated notes tendered 12.4 percent of
the securities by yesterday at midnight, which was the early
deadline for the exchange, according to the statement. Creditors
exchanged 72.4 percent of the second-lien securities by that
time. Bondholders have until July 30 to exchange their debt.

Verso is seeking to exchange the notes for new debt and
warrants that will convert into equity, according to a July 2
statement. Verso first introduced an offer to swap the notes on
Jan. 6, the same day it announced its plan to merge with
NewPage.