Winn-Dixie granted court OK to enter commitment letter for $725 million in exit financing

By Caroline Salls

Pittsburgh, July 27 - Winn-Dixie Stores, Inc. obtained court approval to enter into a commitment letter for $725 million in exit financing from Wachovia Bank, NA and Wachovia Capital Markets, LLC, according to a Thursday filing with the U.S. Bankruptcy Court for the Middle District of Florida.

The $725 million revolving loan includes $300 million for letters of credit.

According to the motion, Winn-Dixie can request to reduce the maximum availability to no less than $600 million until at least 30 days before closing.

In addition, the commitment includes an accordion feature that allows the company to increase the availability by up to $100 million three times during the term of the facility in increments of at least $25 million.

The term will be five years.

Interest will depend on the quarterly average excess availability.

For excess availability of $400 million or greater, interest will be Eurodollar plus 125 basis points; for excess availability between $300 million and $400 million, interest will be Eurodollar plus 150 basis points; for excess availability between $200 million and $300 million, interest will be Eurodollar plus 175 basis points; for excess availability between $125 million and $200 million, interest will be Eurodollar plus 200 basis points and for excess availability of less than $125 million, interest will be Eurodollar plus 225 basis points.

There will be a 100 basis point letter-of-credit fee.

The commitment letter requires the company's plan of reorganization to be confirmed no later than Nov. 30.

Winn-Dixie, a Jacksonville, Fla., supermarket company, filed for Chapter 11 on Feb. 21, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. The case was later transferred to the U.S. Bankruptcy Court for the Middle District of Florida. Its Chapter 11 case number is 05-03817.

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