Tree Island Wire Income Fund
TSX : TIL.UN

Tree Island Wire Income Fund

March 27, 2009 20:01 ET

Tree Island Renegotiates the Terms of Its Credit Facilities

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 27, 2009) - Tree Island Wire Income Fund (the "Fund") (TSX:TIL.UN) today announced that its Canadian and U.S. lenders have waived the notice of default disclosed in its press release dated February 10, 2009 and that the Fund has entered into a one year Re-Stated and Amended Credit Agreement with its incumbent lenders, GE Canada Finance Holding Company and General Electric Capital Corporation.

The amended agreement, among other things, removes a covenant that required Tree Island to maintain a debt service coverage ratio of not less than 2.5 to 1 and now contains a financial covenant that requires the Fund to maintain minimum cumulative 12-month EBITDA values through February, 2010. The amendment reduces the Canadian dollar revolving facility from Cdn$44.5 million to Cdn$35 million and reduces the U.S. dollar revolving facility from US$44 million to US$35 million, with further reductions to $30.5 million on August 1, 2009 and to $28.5 million on November 1, 2009 for both facilities.

Daniel McAtee, President and Chief Executive Officer of Tree Island and a Trustee of the Fund, said, "We are very pleased to have come to a resolution on this amended agreement and we thank the lenders for their efforts. Going forward, economic conditions remain extremely uncertain and we remain focused on managing our cash flow on a day-to-day basis."

GE Canada Finance Holding Company is the administrator of the Canadian facility and General Electric Capital Corporation is the administrator of the U.S. facility.

The description of the amended credit facilities set out above is qualified in its entirety by the Amended Credit Agreements, copies of which will be filed at www.sedar.com.

About the Fund

The Fund was launched on November 12 2002, with the completion of an Initial Public Offering. There are 21,960,447 units of the Fund outstanding, representing a 100% ownership interest in Tree Island.

The Fund's performance depends entirely on the performance of Tree Island.

About Tree Island Industries

Headquartered in Richmond, British Columbia, Tree Island Industries produces wire products for a diverse range of construction, agricultural, manufacturing and industrial applications. Its products include bright wire, stainless steel wire and galvanized wire; a broad array of fasteners, including packaged, collated and bulk nails; stucco reinforcing products, engineered structural mesh, fencing and other fabricated wire products. The company markets these products under the Tree Island, TI Imports and HK Universe brand names. Tree Island also owns and operates a Hong Kong-based trading company that provides internationally sourced products to Tree Island and its customers worldwide.

Forward-Looking Statements

This press release includes forward-looking information with respect to the Fund and the company, including their business, operations and strategies, as well as financial performance and conditions. The use of forward-looking words such as, "may", "will", "expect" or similar variations generally identify such statements. Any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements speak only to the conditions in existence as of the date of this press release, and the Fund maintains no obligation to update such statements. Although management believes that expectations reflected in forward-looking statements are reasonable, such statements involve risks and uncertainties including the risks and uncertainties discussed in the Fund's annual information form dated March 26, 2008 and management's discussion and analysis for the fiscal year ended December 31, 2007.

Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Such risks and uncertainties include, but are not limited to: general economic conditions and markets and, in particular, the potential impact of the current economic downtown, risks associated with operations such as competition, dependence on the construction industry, market conditions for Tree Island's products, supplies of and costs for raw materials, dependence on key personnel, labour relations, regulatory matters, environmental risks, the successful execution of acquisition and integration strategies and other strategic initiatives, foreign exchange fluctuations, the effect of leverage and restrictive covenants in financing arrangements, the cost and availability of capital, the possibility of deterioration in working capital position, the impact on liquidity if the Fund were to go offside of covenants in its debt facilities, the impact that changes in supplier payment terms or slow payment of accounts receivable could have on liquidity, product liability, the ability to obtain insurance, energy cost increases, changes in tax legislation, other legislation and governmental regulation, changes in accounting policies and practices, operations in a foreign country, and other risks and uncertainties set forth in the Fund's publicly filed materials.

Contact Information