Catalyst Paper extends exchange offer, consent bid for 8 5/8% notes

By Angela McDaniels

Tacoma, Wash., Dec. 23 - Catalyst Paper Corp. extended the private exchange offer and consent solicitation for its 8 5/8% senior notes due June 15, 2011 to 5 p.m. ET on Jan. 15 from Dec. 24, according to a company news release.

Approximately $29.35 million principal amount of notes had been tendered as of the close of business on Dec. 22.

Holders who exchange will receive shares of common stock and new 10% senior secured notes due Dec. 15, 2016.

For each $1,000 principal amount of notes tendered, Catalyst is offering $700 principal amount of new notes and 269 shares.

Holders who tendered by 5 p.m. ET on Dec. 9 will also receive an early tender premium of $25 per note.

Catalyst is also soliciting consents to eliminate substantially all of the negative covenants and events of default contained in the indenture as well as modify the definition of credit facilities.

Holders who tender their notes must consent, and consents are needed from holders of a majority of the notes.

The exchange offer began Nov. 23.

The company said that if the exchange offer is completed, it intends to conduct a rights offering to purchase up to C$100 million of common shares.

Catalyst's largest shareholder, Third Avenue International Value Fund, has agreed to participate in the offering and to oversubscribe in an amount to be determined, according to an earlier news release.

The company said there can be no assurance that the rights offering will be completed.

On June 23, Catalyst said it had engaged Genuity Capital Markets to assist with reviewing alternatives to address the maturity of its senior notes.

The company said it would focus on its $354 million of 8 5/8% notes and $250 million of 7 3/8% notes due 2014.

Prompting the action was the "continued deterioration in market conditions affecting the forest products industry generally and newsprint in particular," the company had said.

MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) is the information agent for the exchange offer.

Catalyst is a Richmond, B.C.-based producer of specialty printing papers and newsprint.

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