AbitibiBowater Prices $850,000,000 Senior Secured Notes Offering

AbitibiBowater Inc. announced today the pricing of $850 million of 10.25% senior secured notes due 2018 in a private placement under Rule 144A and Regulation S of the Securities Act of 1933. The closing of the issuance of the Notes is expected to occur on or about October 4, 2010 subject to the satisfaction of customary closing conditions.

The Notes will be issued by ABI Escrow Corporation, a wholly owned subsidiary of AbitibiBowater. ABI Escrow Corporation will merge with and into AbitibiBowater in connection with AbitibiBowater's emergence from creditor protection proceedings, which is expected to occur in the fall of 2010, subject to confirmation of U.S. and Canadian plans of reorganization.

Proceeds of the Notes Offering will be placed in escrow until the effectiveness of the plans of reorganization and will be used upon emergence to repay certain existing debt.

Following emergence, the Notes will be senior secured obligations of AbitibiBowater, will be guaranteed by AbitibiBowater's material U.S. wholly owned subsidiaries and will be secured by substantially all the assets of AbitibiBowater.

The Notes have not been and will not be registered under the Securities Act or any state securities laws. Further, the Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements and, therefore, will be subject to substantial restrictions on transfer. The Offering is being made only to qualified institutional buyers inside the United States and to certain non-U.S. investors located outside the United States.

Source: AbitibiBowater