Tree Island Wire Income Fund announced that it has successfully renewed its senior banking facility with Wells Fargo Capital Finance Corporation Canada as agent for the Canadian and U.S. lenders. The four-year senior secured banking facility has been increased from $35 million to $40 million and now matures on June 11, 2016.

Under the terms of the facility, up to $40 million may be borrowed for Tree Island’s financing requirements in Canadian and/or US dollars. Additionally, a $10 million letter of credit sub-facility will enable Tree Island to open documentary letters of credit for raw material purchases. Interest is charged at variable rates based on the Canadian and/or U.S. Prime rate and the Canadian B.A. rate and/or the Eurodollar rate. The amount advanced under the Facility at any time is limited to a defined percentage of inventories, accounts receivable and real estate, less certain reserves. The facility is secured by a first charge over Tree Island’s assets supported by the appropriate guarantees, pledges and assignments, and requires that certain covenants be met by Tree Island.

Tree Island also announced that it has amended the terms of its forbearance debt with both principal vendors. With one of the vendors, Tree Island has entered into a Second Amendment to Forbearance and Payment Agreement. Under the terms of this agreement approximately US$15.8 million in principal debt will be repaid monthly over a ten year amortization period. Interest is non-compounding, will be accrued on a declining balance starting in June 2017 and is payable over a four year period beginning June 2024. Additionally, approximately US$16.7 million of principal debt for the other vendor will be extinguished with a final payment of US$5 million. The accounting and tax impacts of these two transactions are being determined and once finalized, in the second quarter of 2012, will be material to the statement of financial position and statement of operations.

Dale R. MacLean, president and CEO of Tree Island Industries, commented: “Wells Fargo has once again shown its confidence in Tree Island by not only increasing our facility, but by extending it for an additional four years. I also thank our two key vendors for their ongoing support through these challenging times.”

The Fund was launched on November 12, 2002 with the completion on an initial public offering. The Fund has a 100% ownership interest in Tree Island Industries Ltd and its performance depends on the performance of Tree Island Industries Ltd. Headquartered in Richmond, British Columbia, Tree Island Industries Ltd. produces wire products for a diverse range of construction, industrial, residential, manufacturing, and industrial applications.