Catalyst Paper gets commitment for C$20 million term loan due 2017

By Angela McDaniels

Tacoma, Wash., March 10 - Catalyst Paper Corp. entered into a commitment letter with a Canadian chartered bank for a C$20 million term loan due July 31, 2017, according to a company news release.

The term loan will be provided by the lenders who participate in Catalyst's asset-based loan facility and will be secured by a charge on the assets of Catalyst and its subsidiaries that secures its PIK toggle senior secured notes due 2017. The charge will rank senior to the charge securing the PIK notes.

The term loan can be prepaid in whole or in part at any time without premium.

The term loan is subject to completion of documentation and certain other conditions.

Proceeds will be used to retire the company's remaining $19.4 million of outstanding senior secured floating-rate notes due 2016.

The transaction has the requisite approval of holders of Catalyst's PIK notes.

"The new term loan replaces the high interest rate under the floating-rate notes with a commercial interest rate and provides the company with greater flexibility," Joe Nemeth, president and chief executive officer, said in the news release.

Catalyst Paper makes specialty mechanical printing papers, newsprint and pulp and is based in Richmond, B.C.

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