Blockbuster granted interim access to $125 million DIP financing

By Lisa Kerner

Charlotte, N.C., Sept. 27 - Blockbuster Inc. received interim approval of its $125 million debtor-in-possession financing from the U.S. Bankruptcy Court for the Southern District of New York on Monday, according to an attorney familiar with the case.

As previously reported, Blockbuster, in conjunction with its bankruptcy filing on Sept. 23, secured a commitment for $125 million in new DIP financing from senior noteholders to help meet its obligations to customers, suppliers and employees during the recapitalization process.

Wilmington Trust FSB is the DIP loan agent.

Interest will be either the Index rate plus 750 basis points or Libor plus 850 bps with a 2% Libor floor.

The facility will mature on the earliest of April 30, 2011, upon occurrence of an event of default or acceleration of the loan, the effective date of a plan of reorganization or liquidation and upon termination of the company's plan-support agreement.

Blockbuster will pay a 1.5% commitment fee, a 2% backstop commitment fee, a $75,000 DIP agent administration fee and a $3,500 DIP agent acceptance fee.

The company received interim access to $20 million of the DIP financing as part of the approval of its first-day motions, according to a prior company news release.

Blockbuster, a Dallas-based provider of in-home movies and game entertainment, filed for bankruptcy on Sept. 23 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 10-14997.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.