Keystone Consolidated asks court to approve $80 million exit facility via Wachovia

New York, Aug. 2 - Keystone Consolidated Industries, Inc. asked to be allowed to sign a commitment letter for an $80 million exit credit facility.

Wachovia Capital Finance Corp. will be administrative agent for the facility and Wachovia Capital Markets, Inc. will be lead arranger and bookrunner, according to a filing Tuesday with the U.S. Bankruptcy Court for the Eastern District of Wisconsin.

The financing will be used to fund Keystone's plan of reorganization and to provide working capital for its ongoing business needs.

Syndication of the exit facility is expected to begin promptly once the company accepts the commitment letter.

Included in the $80 million facility will be a term loan of up to $25 million and a revolving credit facility, with availability on the revolver set by a borrowing base. There will be a letter-of-credit facility of up to $6 million.

The interest rate will be set by a grid based on excess availability. For availability of more than $25 million, the revolver will be at Libor plus 200 basis points and the term loan at Libor plus 225 bps; for availability of $15 million to $24.9 million, the revolver will be at Libor plus 225 bps and the term loan at Libor plus 250 bps; and for availability of $14.9 million or less, the revolver will be at Libor plus 250 bps and the term loan at Libor plus 275 bps.

The loan has a 25 basis point unused fee.

Call protection is 101 in the first year, 100.5 in the second year and 100.25 after that.

The facility matures after five years.

Keystone will be required to use excess cash flow to pay down the term loan by up to $2 million a year and $5 million in total.

Keystone paid $250,000 to Wachovia on Tuesday as a fee for negotiation, preparation and documentation of the facility. Other fees and expenses will not be disclosed in open court.

Keystone filed for bankruptcy on Feb. 26, 2004 with the U.S. Bankruptcy Court for the Eastern District of Wisconsin. Its Chapter 11 case number is 04-22422.

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