Yellow receives interim approval of $142.5 million DIP facility

By Sarah Lizee

Olympia, Wash., Aug. 21 – Yellow Corp. received interim approval from the U.S. Bankruptcy Court for the District of Delaware of a $142.5 million new money debtor-in-possession financing, according to an order filed Friday.

As previously reported, the company had received proposals for DIP financing from its prepetition term B-2 lenders, its 40% equity owner MFN Partners, and rival Estes Express Lines, as well as others that were not named.

The deal Yellow decided to go with is being provided by MFN and investment firm Citadel LLC.

Citadel just bought $500 million of Apollo’s term loans, making it the company’s newest B-2 lender.

Citadel has agreed to provide $100 million of the new money, pari with the existing term B-2 debt, and with no rollup of prepetition debt. MFN will provide the remaining $42.5 million in new money on a junior basis, coming in second on the B-2 priority collateral, but junior to the rest of the secured collateral.

Following the interim order, the company can access $17.9 million of the MFN portion and $42.1 million of the Citadel portion.

Citadel and MFN will each receive 4% in DIP fees on the money they are providing. MFN’s portion will bear interest at 15% per annum, and Citadel’s will earn interest at the same rate as under the prepetition B-2 term loan.

MFN has also agreed to provide an additional $70 million delayed-draw on a completely junior basis, if needed.

The facility is set to mature in February 2024.

Yellow is a provider of regional, national and international shipping services based in Nashville. The company filed bankruptcy on Aug. 6 under Chapter 11 case number 23-11069.

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