Asset Impairment Overshadows Catalyst Paper’s Improved Financial Results

Catalyst believes its capital structure is too highly leveraged given current business and economic conditions, and has identified debt reduction as a priority. The company is reviewing alternatives for both its $250 million of 7.375 percent senior unsecured notes due March 2014 and its US$390 million 11.0 percent senior secured notes due December 2016. Discussions are ongoing with certain holders of these notes or their representatives. If the company is unable to make appropriate capital restructuring improvements, the debt level and debt service requirements could negatively impact its financial results and business operation.

Other Developments and Outlook