Louisiana-Pacific prepared for December credit facility maturity, looking to refinance other debt

By Jennifer Lanning Drey

Portland, Ore., Nov. 20 - Louisiana-Pacific Corp. has the resources to pay its $125 million Canadian term loan maturing in December and is pursuing a refinancing strategy for its longer-term debt, Richard Frost, the company's chief executive officer, said during a Thursday presentation at the Bank of America Credit Conference in Orlando, Fla.

"We do have the cash to satisfy the near-term obligations that we have and then we are currently working with banks to see what we can do around working on the rest of the portfolio," Frost said.

Louisiana-Pacific's debt includes $200 million of 8 7/8% senior notes due August 2010.

The company had cash and cash equivalents of $155 million at Sept. 30.

"Our operational focus right now is on managing for cash and generating cash," Frost said.

Following the September freeze in the credit markets, Louisiana-Pacific tightened its focus on cost reductions and began putting forward-looking activities and hold, he said.

"The focus we have right now is to live through this downturn and be ready to go when it starts to turn back up," Frost said.

He later added, "The organization, my management team and the people who work for our company are definitely up to the task to do what we need to do in terms of the harsh and more critical decisions we need to make around our cost structure, and the result is a greatly improved cash burn in 2008, 2009 and 2010."

Louisiana-Pacific expects the housing market to bottom in 2009 and then begin a gradual recovery that will be slower than the recovery rate seen following past housing downturns, Frost said.

Nashville-based Louisiana-Pacific is a supplier of building materials to retail, wholesale, homebuilding and industrial customers.

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