Lyondell seeks court approval of $8.015 billion in DIP financing

By Caroline Salls

Pittsburgh, Jan. 7 - Lyondell Chemical Co. requested court approval of $8.015 billion in debtor-in-possession financing, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The financing was arranged by Citigroup Global Markets Inc., Goldman Sachs Lending Partners LLC, Merrill Lynch Capital Corp., ABN Amro Bank NV and UBS Securities LLC.

The lenders include Access Lender, LLC, which is providing $750 million of the new money loans, as well as Citigroup, Goldman Sachs, Merrill Lynch and UBS.

Lyondell said the ABL facility administrative agent is Citicorp USA, Inc., and the term facility administrative agent has not yet been determined.

As previously reported, of the $8.015 billion financing total, the company said $3.25 billion consists of new term loans; $3.25 billion represents a refinancing of obligations under its existing senior secured credit facilities; and $1.515 billion represents replacement of existing working capital facilities.

According to the DIP financing motion, the company is seeking interim access to $2.167 billion of the term loan funding, dollar-for-dollar roll ups of senior secured loans and full access to the $1.515 billion asset-based revolving credit facility.

The facilities will mature on the earliest of Dec. 15, 2009, the effective date of a plan of reorganization, 30 days after the interim order if no final order has been entered and upon acceleration of the loans.

The new term loans will bear interest at Libor plus 1,000 basis points and the $1.515 billion ABL facility at Libor plus 700 bps. The loans include a 300 bps Libor floor.

Borrowings under the ABL facility will be in minimum amounts of $5 million and multiples of $1 million thereafter.

The DIP financing will be used to help fund Lyondell's operations as it restructures its debt and improves its financial position.

Lyondell is a U.S. subsidiary of LyondellBasell, a Netherlands-based polymer, petrochemicals and fuels company. LyondellBasell's U.S. operations and one of its European holding companies filed for bankruptcy on Jan. 6. The Chapter 11 case number is 09-10023.

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