Vicwest in default on subordinated notes

New York, Oct. 11 - Vicwest Corp. said it defaulted on its C$84 million of subordinated notes after failing to pay the C$5.2 million of interest due Sept. 10 within the 30-day grace period.

Vicwest was unable to make the payment because of a default on its senior credit facilities.

The Toronto company said it has received undertakings from holders of 65% of its notes that they will not exercise any remedies in response to the default before Nov. 15.

Vicwest added that it continues to be in constructive discussions with its senior lenders about the default on its senior credit facilities due to non-compliance with financial covenants. Outstanding debt on the facility is C$36.7 million.

"We are pleased to have support from holders of the great majority of our subordinated notes, so that we can work through these issues in an orderly manner and with a view to continuing our business without interruption to customers, suppliers, or employees", said Charles Blackmon, chief financial officer and executive vice president of Vicwest, in a news release.

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