Catalyst refinances revolving credit facility

    RICHMOND, BC, Aug. 13 /CNW/ - Catalyst Paper Corporation (TSX:CTL) today
announced the replacement of its existing C$350 million revolving operating
facility maturing July 2009 with a new C$330 million revolving asset based
loan facility (ABL) maturing August 2013. The syndication financing team for
this transaction was co-led by CIT Business Credit Canada Inc. (CITBCC is
equally owned by CIBC and CIT Group Inc.) and JPMorgan Chase Bank, N.A. with
CITBCC also serving the role of Agent.
    The credit facility was used to refinance Catalyst's existing debt under
the previous operating facility and will provide for ongoing working capital,
capital expenditure requirements, as well as general corporate purposes.
Collateral provided consists of all accounts receivable, inventories and cash
of the company as well as a first charge on the property, plant and equipment
of the Snowflake, Arizona mill. Availability under the ABL facility is
determined by a borrowing base calculated primarily on balances of eligible
accounts receivable and inventory, less certain reserves.
    The ABL facility includes financial covenants to maintain shareholders'
equity above $649 million, maintain excess availability above $35 million and
not to make capital expenditures in excess of 120% of the annual budget.
    "We are pleased to have completed our credit refinancing which
significantly extends the maturity date and puts in place a facility that
increases our flexibility going forward. This is an excellent result for
Catalyst, particularly in today's challenging credit environment," said David
Smales, Vice President, Finance and Chief Financial Officer, Catalyst Paper.
    The proforma borrowing base as at June 30, 2008, including reserving for
related fees, was $285 million and after drawings of $94 million and letters
of credit of $24 million, $167 million was available to the Company. This
compared to availability of $201 million under the operating facility
previously in place as of this date. The reduction primarily reflects the
different security pledged under the two facilities.

    Catalyst is the largest producer of specialty printing papers and
newsprint in Western North America and also produces market kraft pulp and
owns Western Canada's largest paper recycling facility. The company's six
mills have a combined annual capacity of 2.8 million tonnes of production.
Catalyst is headquartered in Richmond, British Columbia, Canada and its common
shares trade on the Toronto Stock Exchange under the symbol CTL.

For further information:

For further information: Lyn Brown, Vice-President, Corporate Relations,
(604) 247-4713

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