Ainsworth Completes Rights Offering and New Note Offering as part of Comprehensive Refinancing Plan

Goodmans represented Ainsworth Lumber Co. Ltd. (“Ainsworth”), a leading manufacturer and marketer of oriented strand board, which on October 22, 2012, announced that its board of directors had approved a comprehensive refinancing plan which would result in an approximately 30% reduction in total debt, lower borrowing costs and the extension of Ainsworth’s maturity profile. The two transactions involved in the refinancing were a fully backstopped rights offering (by way of prospectus) to raise gross proceeds of Cdn$175 million and a note financing (by way of private placement) for gross proceeds of US$350 million. The aggregate net proceeds received by Ainsworth from these two transactions was used to repay in full Ainsworth’s senior secured term loan due June 2014 and Ainsworth’s 11% senior unsecured notes due July 2015 , which comprised substantially all of Ainsworth’s existing indebtedness.  Brookfield Asset Management Inc., Ainsworth’s largest shareholder, provided a standby commitment for the entire amount of the rights offering. 

The new note offering was completed on November 27, 2012 and the rights offering was completed on December 27, 2012. 

BMO Capital Markets acted as financial advisor to an independent committee of the board of directors of Ainsworth in connection with the rights offering and the refinancing plan.  The syndicate of dealers for the new note offering was led by Bank of America Merrill Lynch.