TimberWest Forest Issues Stapled Units

TimberWest Forest Corp. completed an offering of approximately $125 million of its stapled units on February 12, 2002. The offering was underwritten on a bought deal basis by a syndicate of underwriters comprised of Scotia Capital Inc., BMO Nesbitt Burns Inc., Raymond James Financial Inc., CIBC World Markets Inc., UBS Bunting Warburg Inc., National Bank Financial Inc. and HSBC Securities (Canada) Inc. On February 22, the underwriting syndicate fully exercised its over-allotment option to acquire an additional $18 million of stapled units, which brought the aggregate total proceeds to $143 million.

Each stapled unit consists of a subordinate note receipt representing series A subordinate notes with a principal amount of approximately $8.98, one common share and one hundred preferred shares of TimberWest. The securities are “stapled” so that they can only be transferred as a unit. This structure is designed to be the economic equivalent of a conventional income fund in a corporate form.

Richard Balfour, Michael Urbani and Darren Watt (business) of McCarthy Tétrault LLP acted for TimberWest. Marion Shaw, Joanna Cameron and Melanie Cheesman of Bull, Housser & Tupper acted for the underwriting syndicate.