Wellman gets commitment for $175 million exit facility

By Sara Rosenberg

New York, Aug. 8 - Wellman Inc. received a commitment for a $175 million four-year secured exit financing credit facility, according to an 8-K filed with the Securities and Exchange Commission Friday.

Ableco Finance LLC is leading the new deal.

The facility consists of a $125 million revolver and a $50 million term loan, with both tranches priced at Libor plus 425 basis points with a 3.25% Libor floor.

The revolver has a 50 bps unused fee.

The term loan carries call protection of 102 in year one and 101 in year two.

Financial covenants include maximum total debt to EBITDA, minimum fixed-charge coverage ratio, minimum EBITDA and maximum capital expenditures.

One of the requirements of the exit facility is that the company's new note to first-lien holders is less than $125 million, but, on Aug. 5, the court determined that the value of the first-lien collateral is $140 million.

As a result of this decision, the company will be required to renegotiate the terms of the exit facility or agree on an acceptable capital structure where the value of the note is less than $125 million.

In addition, on Aug. 4, the company amended its debtor-in-possession financing facility, revising certain deadlines.

The company now has until Aug. 15, extended from Aug. 4, to get approval of its disclosure statement, until Sept. 26, extended from Sept. 15, to obtain an order confirming its reorganization plan, and until Oct.6, extended from Sept. 25, to emerge from bankruptcy.

Deutsche Bank is the administrative agent on the DIP.

Wellman is a Fort Mill, S.C.-based manufacturer and marketer of polyethylene terephthalate packaging resins, polyester staple fibers and recycled-based nylon engineering resin.

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