Mercer International Inc. filed an 8-K on October 2, 2026, disclosing that it has elected not to make an approximately $25.8 million interest payment due October 1, 2026 on its 12.875% Senior Notes due 2028, opting instead to use a 30-day grace period while pursuing a comprehensive recapitalization transaction with an ad hoc group of noteholders.

Key Highlights

  • Interest payment deferred: An approximately $25.8 million interest payment due October 1, 2026 on the 12.875% Senior Notes due 2028 was not made; the company elected to use the 30-day grace period provided under the indenture.
  • No event of default: According to the filing, "use of the grace period does not constitute an event of default under the indenture."
  • Ad hoc group holds over 75%: Members of the Ad Hoc Group hold greater than 75% of the aggregate outstanding principal amount of the Notes, the filing disclosed.
  • Two note series involved: Discussions cover both the 12.875% Senior Notes due 2028 and the 5.125% Senior Notes due 2029.
  • Transaction goals stated: The proposed transaction is described as intended to "address the Company's upcoming debt maturities, enhance liquidity and strengthen its balance sheet through a meaningful reduction in the Company's funded debt and associated interest expense."
  • Operations continuing: The company reported that pulp, lumber, and mass timber operations continue in the ordinary course, with customers, suppliers, contractors, and employees being served and paid normally.

Mercer International Enters Advanced Recapitalization Talks While Deferring Note Interest

Mercer International Inc. (NASDAQ:MERC), a Washington-incorporated company headquartered in Vancouver, British Columbia, disclosed on October 2, 2026 that a special committee of independent directors, together with the company's advisors, is in advanced discussions with an Ad Hoc Group of holders of its two senior note series. According to the filing, the Ad Hoc Group's members collectively hold greater than 75% of the aggregate outstanding principal amount of both the 12.875% Senior Notes due 2028 and the 5.125% Senior Notes due 2029.

The company disclosed that it has elected not to make the approximately $25.8 million interest payment that was due October 1, 2026 on the 2028 Notes, choosing instead to utilize the 30-day grace period available under the governing indenture. The filing stated explicitly that use of this grace period "does not constitute an event of default under the indenture." The decision was described as made "in light of ongoing negotiations with the Ad Hoc Group."

The filing described the proposed transaction as a "comprehensive recapitalization transaction and a significant capital infusion" intended to reduce the company's funded debt and associated interest expense, while addressing upcoming debt maturities and enhancing liquidity. The company stated it is "optimistic that it will be able to announce a Transaction in the near term," while also cautioning that "no assurance can be given" that a definitive agreement will be reached, or as to the timing or terms of any such agreement. The company noted that its operations, customer relationships, and obligations to suppliers, contractors, and employees are not expected to be affected by any eventual transaction. The 8-K was signed by Richard Short, Chief Financial Officer.

What Was Disclosed

Mercer International filed an 8-K under Item 7.01 (Regulation FD Disclosure) reporting that it skipped an approximately $25.8 million interest payment on its 2028 Notes and is in advanced recapitalization talks with holders representing more than 75% of its outstanding Notes principal.