Hollinger Closes Credit Facilities and Private Placement

On December 23, 2002, Hollinger International Publishing Inc. (HIPI), closed two financing transactions totalling US$610 million; US$310 million senior secured credit facilities from a syndicate of financial institutions led by Wachovia Bank, N.A., and a Rule 144A private placement of US$300 million of 9 per cent senior notes due in 2010 led by Wachovia Securities. HIPI is the main U.S. holding company subsidiary of U.S.-based Hollinger International Inc., controlled by Canadian-based Hollinger Inc.

The new credit facilities are available to HIPI in the U.S. and its subsidiaries, Telegraph Group Limited and First DT Holdings Limited, in the U.K. The facilities are guaranteed by all of its U.S. and U.K. subsidiaries and secured by charges against all of the assets of such subsidiaries. The new senior notes are guaranteed by Hollinger International and are unsecured. Proceeds of the new financings, together with available cash, were used to redeem existing HIPI notes, to repay amounts owing by Hollinger International to Trilon International Inc., to retire existing forward return equity swaps between Hollinger International and certain Canadian chartered banks, and for general corporate purposes.

Torys LLP acted for Hollinger, with a team that included Peter Birkness, Amanda Balasubramanian, Conrad Sheppard and Jamie Koumanakos in Toronto and Darren Baccus and Martin Dunleavy in New York, for the credit facility, and Andy Beck and Darren Sukonick in Toronto and Geoff Gilbert, Steve Reinhardt, Amy Johnson-Spina and Margaret Walrath in New York, for the senior notes.

Berenson, Minella and Company acted as financial advisor to Hollinger on the financings. Jeffrey Keey of Stikeman Elliott LLP acted for Hollinger in the U.K. In-house counsel Mark Kipnis, Hollinger International, and Peter Atkinson, Hollinger, provided assistance and support. KPMG provided accounting and tax advice to Hollinger.

Shearman & Sterling represented Wachovia in the U.S. and the U.K., with a team that included Michael Zinder, Ken Colaluca, Zarifa Brown, Jessica Miller and Xueli Mao in New York for the credit facilities; Christopher Paci, Pao-Ann Phua, Boon-Li Tan and Blake Dunlap in New York for the senior notes; and Caroline Leeds Ruby and Kacey Harrison in London.