Catalyst reaches agreement
Catalyst Paper Corporation has entered into a commitment letter with a Canadian chartered bank for a $175-million syndicated asset-based loan (ABL) facility. The ABL facility is a pre-condition for Catalyst to emerge from creditor protection and for general corporate purposes thereafter according to a company press release issued last Friday.
The ABL facility matures on the earlier of five years from closing and 90 days prior to maturity of any significant debt and is subject to the completion of a credit agreement, syndication, documentation and certain other conditions. Collateral consists primarily of all present and future working capital assets of the company and the ABL’s borrowing base is calculated on balances of eligible accounts receivable and inventory, less certain reserves.
Catalyst also entered into a commitment letter for a secured exit notes facility of up to $80 million US, providing the company with backstop financing should additional funds be needed to pay costs and expenses or manage other contingencies following an exit from creditor protection.
“Having appropriate financing in place should enable a return to normal trade terms with our vendors as we exit from creditor protection,” Catalyst president and CEO Kevin J. Clarke stated in the release, “and will, in turn, assure our customers of continued excellent service and product quality going forward. We kept high operating standards throughout this process and this gives us competitive momentum as we prepare to emerge successfully from CCAA [Companies’ Creditors Arrangement Act] in the near term.”
