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Catalyst Refinances Revolving Credit Facility
Richmond, British Columbia, Canada, 13 August 2008 – Catalyst Paper Corporation (TSX:CTL) today announced the replacement of its existing CAD 350 million revolving operating facility maturing July 2009 with a new CAD 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, and general corporate purposes. Collateral provided consists of all accounts receivable, inventories and cash of the company, and 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 CAD 649 million, maintain excess availability above CAD 35 million, and not to make capital expenditures in excess of 120% of the annual budget.

The proforma borrowing base as at 30 June 2008, including reserving for related fees, was CAD 285 million and after drawings of CAD 94 million and letters of credit of CAD 24 million, CAD 167 million was available to the company. This compared to availability of CAD 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 metric tons of production. Catalyst is headquartered in Richmond, British Columbia, Canada, and its common shares trade on the Toronto Stock Exchange under the symbol CTL.

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