Wellman $225 million DIP facility approved

By Caroline Salls

Pittsburgh, April 7 - Wellman, Inc. obtained final court approval of its $225 million debtor-in-possession facility, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Deutsche Bank Securities is the lead arranger and bookrunner on the DIP facility, and Deutsche Bank Trust Co. Americas is the administrative agent and collateral agent.

The $225 million DIP commitment includes a $40 million letter-of-credit subfacility.

The DIP facility will mature on the earliest of one year from closing, the effective date of a plan of reorganization and upon funding of a sale of the company.

Interest will be Libor plus 275 basis points.

The company will pay a fee of 1.25% of each lender's commitment, a closing fee of 0.5% of the maximum amount of the loan and a fee equal to 0.375% times the daily average unused portion of the facility.

Wellman will also pay a 275 bps standby letter-of-credit fee.

The proceeds of the DIP financing, combined with cash from operations, will be used to fund the company's post-bankruptcy operating expenses, including payments to employees and suppliers.

As previously reported, at an April 1 hearing, the bankruptcy court ordered the company to provide adequate protection to its unsecured creditors before the DIP could be approved.

Wellman, a Fort Mill, S.C., polyester products manufacturer, filed for bankruptcy on Feb. 22. Its Chapter 11 case number is 08-10595.

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