MERCER INTERNATIONAL INC. (NASDAQ:MERC) Files An 8-K Entry into a Material Definitive Agreement

ITEM1.01

The following summary set forth below in this Item 1.01 is
qualified in its entirety by the Indenture and the Registration
Rights Agreement (each as defined below) which are filed with
this Current Report on Form 8-K as Exhibits 4.1 and 10.1,
respectively, and are incorporated herein by reference.

2024 Notes Indenture

On February3, 2017, Mercer International Inc. (the Company) and
Wells Fargo Bank, National Association, as trustee, entered into
an indenture (the Indenture) with respect to the Companys
issuance of 6.500% senior notes due 2024 in an aggregate
principal amount of $225,000,000 (the Notes). The Notes are
unsecured and rank equally in right of payment with all of the
Companys existing and future unsecured senior indebtedness,
effectively junior in right of payment to any of the Companys
existing and future secured indebtedness to the extent of the
assets securing such indebtedness and the indebtedness and other
liabilities of subsidiaries of the Company and senior in right of
payment to any of the Companys future subordinated indebtedness.

Interest and Maturity

The Notes will mature on February1, 2024 and interest on the
Notes will be payable semi-annually in arrears on each February1
and August1, commencing August1, 2017. Interest will be payable
to holders of record of the Notes on the immediately preceding
January15 and July15 and will be computed on the basis of a
360-day year consisting of twelve 30-day months.

Optional Redemption

At any time prior to February1, 2020, the Company may on one or
more occasions redeem up to 35% of the aggregate principal amount
of the Notes issued under the Indenture at a redemption price of
106.500% of the principal amount of the Notes redeemed, plus
accrued and unpaid interest and additional interest, if any, to,
but not including, the redemption date, with the net proceeds of
certain equity offerings, provided that:

On and after February1, 2020, the Company may redeem all or a
part of the Notes upon not less than 30 or more than 60 days
notice to the holders, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued
and unpaid interest (including any additional interest), if any,
to (but not including) the applicable redemption date, on the
Notes redeemed to the applicable redemption date, if redeemed
during the twelve-month period beginning on February1 of the
years indicated below, subject to the rights of holders of such
Notes on the relevant record date to receive interest on the
relevant interest payment date:

In addition, at any time prior to February1, 2020, the Company
may on one or more occasions redeem all or a part of the Notes at
the make-whole premium set forth in the applicable Indenture,
plus accrued and unpaid interest to (but not including) the
redemption date.

Change of Control

If a change of control event occurs (as defined under the
applicable Indenture), each holder of Notes of the applicable
series may require the Company to repurchase all or a portion of
that holders Notes for cash at a price equal to 101% of the
aggregate principal amount of the Notes repurchased, plus any
accrued but unpaid interest and additional interest, if any, on
the Notes repurchased, to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive
interest due on the relevant interest payment date).

Certain Covenants

The Indentures contain covenants that, among other things, limit
the Companys ability and the ability of the Companys restricted
subsidiaries to, directly or indirectly: (1)declare or pay any
dividends or make any other payment or distribution on account of
the Companys or any of its subsidiaries equity interests;
(2)purchase, redeem or otherwise retire for value any equity
interest of the Company; (3)make any payment on or with respect
to or purchase, redeem, defease or otherwise acquire or retire
for value any indebtedness of the Company that is contractually
subordinated to the Notes; (4)incur, issue, assume or guarantee
any indebtedness and issue any shares of preferred stock;
(5)create, incur or assume certain liens; (6)consolidate, merge
or transfer all or substantially all of the Companys assets,
unless certain conditions are met; (7)engage in transactions with
affiliates, unless certain conditions are met; (8)guarantee any
other indebtedness of the Company, unless certain conditions are
met; and (9)designate any restricted subsidiary to be an
unrestricted subsidiary, unless such action would not cause an
event of default.

In the event that the Notes are rated as investment grade debt by
Moodys Investors Service, Inc. and Standard Poors Rating
Services, and no event of default has occurred, most of the
aforementioned covenants as well as the Companys obligation to
offer to repurchase the Notes following certain asset sale events
will be suspended.

Events of Default

In the case of an event of default occurring and continuing, the
trustee or the holders of 25% of the principal amount of the then
outstanding Notes may declare all Notes to be immediately due and
payable, except that a default resulting from a bankruptcy,
insolvency or reorganization with respect to the Company, any
restricted subsidiary of the Company that is a significant
subsidiary or any group of its restricted subsidiaries that,
taken together, would constitute a significant subsidiary of the
Company, will automatically cause all Notes to become due and
payable immediately without further action or notice. Each of the
following constitutes an event of default under the Indenture:

and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $35.0million or more;

Registration Rights Agreement

In connection with the issuance and sale of the Notes, on
February3, 2017, the Company entered into a registration rights
agreement in respect of the Notes (the Registration Rights
Agreement) with Credit Suisse Securities (USA) LLC, as
representative of the initial purchasers. Under the Registration
Rights Agreement, the Company agreed to use its commercially
reasonable efforts

to file with the Securities and Exchange Commission (the SEC) and
cause to be declared effective within 240 days after February3,
2017, a registration statement relating to an offer to issue a
series of new notes having terms substantially identical to the
Notes in exchange for outstanding Notes (an Exchange Offer).

If the Company is not permitted by applicable law or SEC policy
to consummate an Exchange Offer or file a registration statement
related to such Exchange Offer in respect of the Notes, then the
Company will be required to file a shelf registration statement
(the Shelf Registration Statement) to register resales of the
applicable series of Notes by holders thereof who satisfy certain
conditions relating to the provision of info in connection with
the Shelf Registration Statement. If the Company fails to satisfy
these obligations, the Company may be required to pay additional
interest to holders of the Notes under certain circumstances.

The information set forth under the heading 2024 Notes Indenture
in Item 1.01 of this Current Report on Form 8-K is incorporated
by reference into this Item 2.03.

Completion of Notes Offering

On February3, 2017, the Company issued a press release announcing
the completion of its previously announced offering of Notes. A
copy of this press release is attached hereto as Exhibit 99.1 and
is incorporated herein by reference.

The Notes were sold to qualified institutional buyers in reliance
on Rule 144A under the Securities Act of 1933, as amended (the
Securities Act), and outside the United States to non-U.S.
persons in reliance on Regulation S under the Securities Act.

About MERCER INTERNATIONAL INC. (NASDAQ:MERC)

Mercer International Inc. is engaged in producing (northern bleached softwood kraft) NBSK pulp. The Company operates in the pulp industry and produces pulp for resale, known as market pulp, in Germany. It also produces and sells tall oil, which is used as both a chemical additive and as a green energy source. The Company operates over two mills in Eastern Germany and approximately one mill in Western Canada. The Company’s NBSK pulp mills include Rosenthal mill, which is located in the town of Blankenstein, Germany, approximately 300 kilometers south of Berlin; Stendal Mill, which is located near the town of Stendal, Germany, approximately 130 kilometers west of Berlin, and Celgar Mill, which is located near the city of Castlegar, British Columbia, Canada, over 600 kilometers east of Vancouver. The Company’s NBSK pulp mills has an annual production capacity of approximately 1.5 million air-dried metric tons (ADMTs) of NBSK pulp and generates over 305 megawatts (MW) of electricity.

MERCER INTERNATIONAL INC. (NASDAQ:MERC) Recent Trading Information

MERCER INTERNATIONAL INC. (NASDAQ:MERC) closed its last trading session up +0.23 at 12.48 with 271,923 shares trading hands.