Smart Papers seeks to amend DIP facility to allow Plainfield to assume $28.42 million of financing

By Caroline Salls

Pittsburgh, Aug. 29 - Smart Papers, LLC requested court approval to amend its debtor-in-possession financing agreement to allow Plainfield Special Situations Master Fund Ltd. to assume funding of $28.42 million of the DIP facility under Smart Papers' plan term sheet, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the term sheet for Smart Papers' plan of reorganization, plan sponsor Plainfield agreed to purchase the company's Wachovia debt.

The Plainfield DIP financing will include a $17.04 million revolver, $2.91 million in supplemental loans and an $8.48 million term loan.

Plainfield purchased $27.91 million principal amount of Wachovia debt, plus interest.

Smart Papers will pay Plainfield the $160,000 remaining of its $460,000 closing fee.

Maturity on the supplemental loans will be the earliest of the occurrence of an event of default, upon termination of the plan term sheet or Dec. 31.

Interest on the supplemental loans will be Prime rate plus 300 basis points, and Smart Papers will have the option to pay interest at Prime rate plus 150 bps and defer payment on the remaining interest, provided that all deferred interest payments will be due on the supplemental loan termination date.

Plainfield has also agreed to make an additional $7.3 million in tranche B revolving loans available to the company.

The tranche B revolvers will be made in $100,000 increments and will carry the same interest and maturity as the supplemental loans.

A hearing is scheduled for Aug. 31.

Smart Papers, a Hamilton, Ohio-based paper manufacturer, supplier and marketer, filed for bankruptcy on March 21. Its Chapter 11 case number is 06-10269.

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