AbitibiBowater amends loan, revising covenants, raising pricing

By Sara Rosenberg

New York, Nov. 18 - AbitibiBowater Inc.'s Bowater subsidiaries amended their credit facilities, waiving compliance with certain financial covenants for the third quarter, revising the leverage ratio for the fourth quarter, and increasing pricing by 125 basis points, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

In addition, the facilities were reduced by $10 million each and the company no longer has to immediately comply with the more restrictive borrowing base requirements by Nov. 15. Instead, there's phased-in implementation through March 31, 2009.

The amendment also added a provision requiring that 75% of the proceeds of asset sales be used to reduce amounts outstanding under both facilities on a pro rata basis, and the company can't maintain more than $70 million of cash on hand on a combined consolidated basis, with any excess to be used to reduce amounts outstanding under the facilities.

The amendment is effective as of Nov. 12.

Wachovia is the administrative agent on the Bowater Inc. facility and the Bank of Nova Scotia is the administrative agent on the Canadian Forest Products Inc. facility.

AbitibiBowater is a Montreal-based producer of newsprint, commercial printing papers, market pulp and wood products.

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