Securities Act of 1933 - Rule 144(c)

December 12, 2005

Response of the Office of Chief Counsel
Division of Corporation Finance

Based on the facts presented, the Division's views are set forth below. Capitalized terms have the meanings ascribed to them in your letter.

• Mercer-WA may take into account the reporting history of Mercer in determining whether Mercer-WA is eligible to use Form S-3 or Form S-8 under the Securities Act and in determining whether Mercer-WA may provide information in a Form S-4 under the Securities Act in a manner permitted for a company that is eligible to use Form S-3, as contemplated by General Instruction B.1.a. of Form S-4.
   
• Mercer's Exchange Act reporting history may be taken into account when determining Mercer-WA's compliance with the current public information requirements under Rule 144(c)(1) under the Securities Act. The most recent report or statement published by Mercer prior to the Conversion and the average weekly reported trading volume in Mercer Shares during the time periods specified by Rule 144(e)(1) may be taken into account in determining the limitations on the amount of securities that may be sold pursuant to Rule 144(e).
   
• Persons who have filed statements on Schedule 13D or Schedule 13G reporting beneficial ownership of Mercer Shares will not be required to make any additional or amended filings solely as a result of the Conversion.
   
• The actions to be taken by Mercer-WA to assume the Stock-Based Benefit Plans do not constitute actions that require the disclosure of information required by Item 10 of Schedule 14A.
   
• Without necessarily agreeing with your analysis, the Division will not object if Mercer and Mercer-WA omit the financial and other information required by Form S-4 from the Proxy Statement/Prospectus to the same extent permitted by Instruction 4 to Item 14 of Schedule 14A. In reaching this position, we note your representation that, immediately after the Effective Time, the financial condition of Mercer-WA and its subsidiaries will be substantially the same as the financial condition of Mercer and its subsidiaries immediately prior to the Effective Time and that all information necessary for evaluation of the Conversion will be disclosed in the Proxy Statement/Prospectus.
   
• The Division will not recommend enforcement action to the Commission if (1) Mercer-WA does not register under the Securities Act its assumption of Mercer's obligations under the Mercer Debt Securities, and (2) Mercer-WA does not qualify supplemental indentures under the Trust Indenture Act in connection with its assumption of such obligations. In arriving at these positions, we have noted in particular your representation that Mercer-WA intends to deliver to the trustee under the indenture governing the Convertible Notes an opinion of counsel that such indenture authorizes the trustee to enter into a supplemental indenture without the vote or consent of the holders of the Convertible Notes for the purposes of effecting the Conversion and, in particular, changing the obligor from Mercer to Mercer-WA pursuant to the Conversion. We have further noted your representation that Mercer-WA will deliver to the trustee under the indenture governing the Senior Notes, if so required by the trustee, an opinion of counsel that such indenture authorizes the trustee to enter into a supplemental indenture without the vote or consent of the holders of the Senior Notes for the purposes of effecting the Conversion and, in particular, changing the obligor from Mercer to Mercer-WA pursuant to the Conversion.
   
• The Division will not recommend enforcement action to the Commission if the Mercer-WA Common Shares issuable upon conversion or redemption of the Convertible Notes are issued without registration under the Securities Act in reliance on your opinion as counsel that the exemption provided by Section 3(a)(9) of the Securities Act will be available for the exchange. In arriving at this position, we note that:
   
1. The indenture pursuant to which the Convertible Notes were issued does not require the solicitation of, and neither Mercer-WA nor Mercer will solicit, the consent or vote of the holders of the Convertible Notes with respect to Mercer-WA's assumption of the obligations under the Convertible Notes;
    
2. The indenture governing the Convertible Notes permits Mercer-WA, Mercer, and the trustee to execute supplemental indentures in connection with Mercer-WA's assumption of the obligations under the Convertible Notes without the consent or vote of the holders of the Convertible Notes; and
    
3. No commission or other remuneration will be paid or given, directly or indirectly, in connection with the conversion or redemption of the Convertible Notes.
    
• Mercer-WA may be treated as an issuer subject to the reporting requirements of the Exchange Act for purposes of the Rule 174(b) exemption from the prospectus delivery requirements of Section 4(3) under the Securities Act.
   

You have not requested that the Division confirm your views regarding the applicability of Rule 414 under the Securities Act and Rule 12g-3 under the Exchange Act to the Conversion. Consequently, the Division is not expressing any view in this regard.

These positions are based on the representations made to the Division in your letter. Any different facts or conditions might require different conclusions. Further, this response expresses the Division's position on enforcement only and does not express any legal conclusion on the questions presented.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/corpfin/cf-noaction/mercer121205.htm