W.R. Grace allowed to replace DIP facility with improved financing

By Lisa Kerner

Charlotte, N.C., Feb. 16 - W.R. Grace & Co. was granted court approval to enter into letter-of-credit and hedging agreements that will allow it to terminate its existing debtor-in-possession facility, which matures on April 1, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported the company said the letter-of-credit and hedging transactions will allow it to replace the current DIP loan with a more cost-effective form of financing that takes advantage of its substantial cash reserves.

The new financing would provide a bridge to its expected exit from Chapter 11 bankruptcy.

W.R. Grace would enter into a $100 million one-year cash collateralized letter-of-credit agreement with Bank of America, NA, as well as a new ISDA master agreement with Bank of America.

The company said previously it did not expect to be able to emerge from bankruptcy before the April 1 expiration of the DIP loan.

W.R. Grace, a Columbia, Md.-based specialty chemicals company, filed for bankruptcy on April 2, 2001. Its Chapter 11 case number is 01-01139.

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