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Domtar announces redemption of certain outstanding notes

Press release from the issuing company

Montreal - Domtar Corporation today announced that it will redeem approximately US$135 million in aggregate principal amount of its 7.875% Notes due 2011, representing all of the notes outstanding of this series.

The notes will be redeemed at a redemption price of 100 percent of the principal amount, plus accrued and unpaid interest, as well as a make-whole premium. The accrued interest will be paid for the period from October 15, 2010 up to, but excluding, the redemption date of November 19, 2010. The make-whole premium will be calculated three days prior to redemption in accordance with the terms of the indenture governing the notes.

The terms of the redemption are described in the notice of redemption to be sent to registered holders on or about October 19, 2010.

Notes are to be surrendered to The Bank of New York Mellon, as trustee and paying agent, in exchange for the payment of the redemption price. Holders, who hold their notes through The Depository Trust Company, or DTC, will receive payment through DTC.