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Kaiser Aluminum signs commitment for new $200 million DIP facility, $250 million exit facility
New York, Jan. 18 - Kaiser Aluminum Corp. said it has signed commitment letters for a replacement $200 million debtor-in-possession credit facility and a $250 million exit financing facility.
J.P. Morgan Securities Inc. is lead arranger, sole bookrunner and syndication agent for the new facility. JPMorgan Chase Bank is administrative agent. CIT Group/Business Credit, Inc. is co-arranger.
The new DIP would replace an existing DIP of the same size which expires on Feb. 13. It will run for a year, unless the reorganization is completed sooner, and carry interest at Libor plus 225 basis points. There is an unused fee of 20 to 35 basis points.
The exit facility would consist of a $200 million five-year revolving credit facility and a $50 million six-year term loan.
The revolver will have similar terms to the DIP but will mature after five years, not require an additional commitment fee and will be available for general corporate purposes.
The term loan will pay interest at Libor plus 550 basis points and mature after six years. It will be secured by a junior lien.
Kaiser said the proposed new facilities follow work by the company and its financial adviser, Lazard Freres & Co., LLC, in which 14 possible lenders were contacted, including asset-based lenders, hedge funds, investment banks and commercial banks. Thirteen proposals were received, meetings were held with eight and the field was then narrowed to three.
In a filing with the U.S. Bankruptcy Court for the District of Delaware on Friday, Kaiser said the creditors committee supports the proposed new facility and the company added that it also consulted with the asbestos committee and the asbestos representative in its case.
Kaiser said it has asked the court for a hearing to approve the new facility on Feb. 2.
Kaiser, a Houston aluminum company, filed for bankruptcy on Feb. 12, 2002. Its Chapter 11 case number is 02-10429.
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