Attention Business/Financial Editors: Clearwater announces successful Extension of term debt /Not for release over US newswire services/ HALIFAX, Dec. 9 /CNW/ - (TSX:CLR.UN, CLR.DB, CLR.DB.A): - Senior term debt successfully extended until June 8, 2009 to allow additional time to refinance these facilities - Certain Foreign exchange contracts restructured and negative mark to markets financed through loans provided by foreign exchange lenders through 2009 - Management is confident in refinancing its senior term debt within the extension period and is working with a number of lenders to do so Today, Clearwater Seafoods Limited Partnership ("Clearwater"), a subsidiary of Clearwater Seafoods Income Fund (the "Fund") reported the successful extension of its term debt facilities. As a result, Canadian $43 million and US$15 million of term notes previously due on December 8, 2008 have been extended to June 8, 2009 in order provide sufficient time for management to refinance its senior indebtedness. Under the extension, the term notes contain additional positive covenants including without limitation minimum earnings before interest, taxes, depreciation and amortization levels and additional negative covenants including without limitation restrictions on capital spending and asset dispositions, restrictions on incurring additional indebtedness and a prohibition on distributions be paid during the extension period. Clearwater also announced that it has arranged with its foreign exchange lenders to restructure certain of its foreign exchange contracts to match its foreign currency receipts. As a result, option contracts with a mark to market liability of approximately $16 million will be closed and the resulting cash payment due will be financed by its foreign exchange lenders through the provision of a line of credit of approximately $16 million. The line will be repayable over a twelve-month period. At the same time Clearwater will enter into an amount of forward contracts equivalent to the amount of option contracts closed out but with maturities that extend throughout 2009. The expected effect of the closeout of these options and new forward contracts in 2009 is that net cash flows from US dollar, Euro and Yen sales will be at contract rates of approximately US 1.11, Euro 1.62 and Yen 0.0123 providing effective coverage for 2009 estimated annual cash flows. As well, in concert with this restructuring of its exchange contracts, Clearwater has reconfirmed its policy to hedge a portion of its foreign currency receipts for 12 to 24 months but will limit the contracts used going forward to forward contracts. Management has traditionally hedged between 50% and 75% of its foreign exchange receipts. Management is confident that it can successfully conclude the refinancing of the term notes over the upcoming six months with replacement facilities that are flexible, low cost to the business and sufficient to meet our operating, capital and debt retirement needs going forward and will update the market if and when that refinancing is complete. Operations update Management is currently working with a number of lenders who are completing a due diligence process for replacement debt facilities. We believe Clearwater's strategy of operating with a variety of species and selling to a diverse group of customers worldwide will continue to show positive results in what management expects to be a challenging economic environment over the next twelve months. Management is pleased to have completed our multi-year vessel renewal program. With the last of Clearwater's planned frozen-at-sea vessel conversions complete the fleet is now fully operational with no major vessel acquisitions or conversions currently planned for the next three to five years. Management believes this will result in a more efficient fleet with lower costs, improved quality and greater catch volumes, all of which will serve to improve profitability. Harvest costs, which in 2008 have been impacted by higher fuel costs, have declined in the fourth quarter to below year-to-date levels. For reference, a one-cent per litre change in the price of fuel impacts harvesting costs by approximately $280,000 based on fiscal 2007 fuel purchases. Schedule of foreign exchange contracts As a result of the restructured foreign exchange contracts referred to above, following is a summary of our contracts for 2009 as at December 8, 2008: - Sell US $ 78 million at an average rate of 1.11 - Sell Euros 8 million at an average rate of 1.62 - Sell Yen 3 billion at an average rate of 0.0123 These figures exclude contracts with Gltinir Banki hf, which is currently in receivership, and as a result Clearwater is uncertain as to Glitnir Bank's ability to perform its obligations as a counterparty on these contracts. The details of these contracts are disclosed in Clearwater's 2008 third quarter report. Commentary regarding forward-looking statements This news release contains forward-looking statements. Such statements are subject to known and unknown risks, uncertainties, and other factors outside management's control that could cause actual results to differ materially from those expressed in the forward looking statements. These statements are also based on various assumptions. The Fund does not assume responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances, other than as required by applicable laws. About Clearwater Clearwater is recognized for its consistent quality, wide diversity and reliable delivery of premium seafood, including scallops, lobster, clams, coldwater shrimp, crab and ground fish. Since its founding in 1976, Clearwater has invested in science, people, technology, resource ownership and resource management to preserve and grow its seafood resource. This commitment has allowed it to remain a leader in the global seafood market. For further information: Robert Wight, Chief Financial Officer, Clearwater, (902) 457-2369; Tyrone Cotie, Director of Corporate Finance and Investor Relations, Clearwater, (902) 457-8181.