OPTI Closes $1B Offering

OPTI Canada Inc said Friday that its previously announced debt financings have been successfully placed with institutional investors and banks located in the United States and Canada. The financing package includes US$1.0 billion of 8 1/4% senior secured notes due 2014 and a CDN$500 million revolving credit facility.

"The success of these financings reflects the proximity to start-up in 2007 of the first Phase at Long Lake," said Sid Dykstra, President and CEO of OPTI. "OPTI has a capital structure that is consistent with our long-term asset base and that provides a solid platform to continue with our phased development plan to achieve our target of 120,000 barrels per day of Premium Sweet Crude."

At closing of the transactions, OPTI realized net proceeds from the senior notes of CDN$451 million after deduction for expenses, repayment of existing project debt and funding of an interest reserve account, and has access to a CDN$500 million un-drawn revolving credit facility. Total long term debt is US$1.45 billion, made up of a US$450 million Term Loan B and the US$1.0 billion 8 1/4% senior secured notes, with interest on long term debt having been pre-funded through to the end of 2008. OPTI recently announced a 2007 capital program totaling CDN$714 million, which is primarily directed toward the completion and start-up of Long Lake Phase 1, up front engineering on Phase 2 and activities to support future phases.

The senior secured notes, rated B1/BB, are due in 2014 and bear an interest rate of 8 1/4%. Credit Suisse and RBC Capital Markets acted as joint book-running lead managers and TD Securities acted as joint lead manager. The syndicate also included RBS Greenwich Capital, Scotia Capital, BNP Paribas and Societe Generale.

The bank syndicate for the revolving credit facility was co-led by TD Securities and RBC Capital Markets, with Credit Suisse as lead manager, and included The Royal Bank of Scotland, plc, The Bank of Nova Scotia, BNP Paribas (Canada) and Societe Generale.

OPTI Canada Inc. is a Calgary, Alberta-based company focused on developing the fourth and next major integrated oil sands project in Canada, the Long Lake Project, in a 50/50 joint venture with Nexen Inc. The first phase of the Project consists of 72,000 barrels per day of SAGD (steam assisted gravity drainage) oil production integrated with an OPTI-operated upgrading facility, using OPTI's proprietary OrCrude(TM) process and commercially available hydrocracking and gasification. Through gasification, this configuration substantially reduces the exposure to and the need to purchase natural gas. The Project is expected to produce 58,500 bbl/d of products, primarily 39 degrees API premium sweet crude with low sulfur content, making it a highly desirable refinery feedstock.