TimberWest says ISS Canada backs changes to subordinate notes

New York, Dec. 8 - TimberWest Forest Corp. said that RiskMetrics Group - ISS Governance Services is supporting its proposal to amend the subordinate notes issued as part of its stapled units.

Under the amendments, the interest will be changes to a variable rate based on TimberWest's cash available for distribution instead of the current fixed rate.

The company said the "key advantage" of the proposed variable rate structure is that unitholders will earn taxable interest income that better reflects the underlying cash generated by its businesses. That cash generation is currently "materially less" than the $1.08 per stapled unit level.

If the proposed amendments are not adopted, unitholders will continue to accrue taxable interest income at $1.08 per stapled unit level even if they are not receiving cash distributions at that level, TimberWest said. In addition, TimberWest will be required to record this higher level of accrued interest as a liability on its balance sheet until the amounts are paid.

Unitholders will be asked to approve the changes at a special meeting on Dec. 19.

TimberWest is a land management company based in Vancouver, B.C.

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