Western Forest Products reduces and renegotiates U.S. term-debt

Mar 12, 2007. /Lesprom Network/. Western Forest Products Inc. announced on March 8 that it has renegotiated the terms of its U.S. dollar denominated long-term debt with the Brookfield Bridge Lending Group. Principal changes to the terms include: • Interest rate reduced from floating one-month LIBOR + 8.15% to floating one-month LIBOR plus 3% • Annual fees of 0.75% (1% in final year) eliminated • U.S. dollar denominated debt reduced from $95.3 million to $73.7 million through a payment of $21.6 million from the company’s cash reserves The U.S. debt matures on March 10, 2010 and may be fully or partly prepaid at anytime without penalty. In addition to the U.S. debt, at December 31, 2006 the company had outstanding CAD 99.9 million of Canadian dollar denominated debt that will mature on March 10, 2008. The Canadian debt bears interest at floating CIBC Prime plus 5.25%. Commenting on the revised terms, Reynold Hert, president and CEO stated, “The combination of lowering the U.S. debt, reducing the interest rate and the other amendments will together save the company approximately $7.0 million annually in interest costs and is an important next stage in our efforts to refinance the company’s balance sheet and reduce our cost of capital.” Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer with an annual allowable cut of approximately 7.7 million cubic meters of timber (before temporary AAC reductions and reductions with respect to the removal of certain private timberlands from Tree Farm Licences) and lumber capacity in excess of 1.5 billion board feet from eight sawmills and four remanufacturing plants. Principal activities conducted by the Company and its subsidiaries include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, and value-added remanufacturing. Substantially all of Western’s logging is conducted on government owned timberlands in British Columbia. All of Western’s operations, employees and corporate facilities are located in the coastal region of British Columbia while its products are sold in over 20 countries worldwide.