Timber Notes FAQs

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  Can you describe the timberland sale transaction?

In October 2004, as part of a larger transaction, OfficeMax Incorporated (the “Company”), formerly known as Boise Cascade Corporation, sold our timberlands for $1,650 million consisting of $15 million in cash plus credit-enhanced timber installment notes in the amount of $1,635 million (the "Installment Notes"). The Installment Notes were issued by single-member limited liability companies (the “Note Issuers”) formed by Boise Cascade, L.L.C. (the purchaser of the timberlands). The Installment Notes are 15-year non-amortizing obligations and were issued in two equal $817.5 million tranches. In order to support the issuance of the Installment Notes, the Note Issuers transferred a total of $1,635 million in cash ($817.5 million each) to Lehman Brothers Holdings Inc. ("Lehman") and Wachovia Corporation ("Wachovia") (Wachovia was later acquired by Wells Fargo & Co.). Lehman and Wachovia issued collateral notes (the "Collateral Notes") to the Note Issuers.

  How were the timber Installment Notes credit enhanced?
  Why didn’t OfficeMax pursue a cash transaction versus accepting Installment Notes in exchange for the timberlands?
  How did OfficeMax monetize the Installment Notes received in exchange for the timberlands?
  What did OfficeMax receive as a result of the Installment Notes and Securitized Notes transactions?
  When will the Wachovia Guaranteed Installment Notes and related Securitization Notes mature and how will they eventually be defeased?
  What recourse do the Securitization Note holders have against OfficeMax in the event of a default on either the Lehman or Wachovia guaranteed tranches?
  How did the Lehman bankruptcy affect the Installment Notes transaction?
  Why was the value of the Timber Notes Receivable written down in the third quarter of 2008?
  Why was the value of the corresponding liability (Securitized Notes) on the OfficeMax consolidated balance sheet not written down subsequent to the Lehman bankruptcy?
  Can you describe other cash and non-cash financial impact to OfficeMax resulting from the Lehman bankruptcy?
  How does Lehman’s proposed bankruptcy plan affect OfficeMax?
  Does OfficeMax expect any additional adverse financial ramifications related to the timber notes transactions?
  How can I find more information on the timber notes transaction?
  Do you consider the timber securitization notes debt?
  How will OfficeMax pay the taxes it’s currently deferring on the Wachovia-related notes when they come due?
  Can OfficeMax unwind this securitization or somehow remove it from the balance sheet?
  Do you include the Timber Notes Receivable and the corresponding liability (Securitization Notes) when calculating various financial metrics and ratios used to assess the financial health or valuation of OfficeMax including total debt, debt leverage ratios, enterprise valuation ratios, Z-Scores or other metrics?
  How does the $735 million 3-month bridge loan facility that was announced on September 30, 2019 relate to the Timber Notes?