<B>Asia Pulp and Paper Sets up Exchange Offer</B>

Asia Pulp and Paper Co Ltd. has made a debt exchange offer to holders of $1.45 billion of its bonds. The company said in a statement that it was offering to exchange the notes for a combination of cash, new 15 percent guaranteed five-year notes and warrants for its American depositary shares or more of the new notes, according to a report by Reuters.

"(The primary purpose is) to reduce the total amount of its debt at the holding company level and to extend the dates on which APP's debt must be repaid or is redeemable at the options of the holders," it said.

APP also owns the leading Indonesian pulp and paper firms PT Indah Kiat Pulp and Paper.

The notes covered by the proposed offer are:

- Up to $250 million guaranteed senior unsecured floating rate notes due

next October.

- Up to $250 million 3.5 percent guaranteed convertible notes due April 2003.

- Up to $700 million zero coupon bond "liquid yield option" notes due 2012.

- Up to $250 million secured FRNs, series B, due April 2002.

APP said holders of the 2001 notes also had the option to extend the maturity to April 4 2004 and increase the floating rate to six-month LIBOR plus an annual 7.0 percent from 4.0 percent.