EaglePicher's $295 million senior secured debtor-in-possession financing, led by Goldman Sachs, was being reworked last Wednesday. New terms had not been finalized by the time CIN went to press in the holiday-shortened week. An official at the company confirmed that terms on the deal were being changed, but would not comment on the details. Pricing on $50 million of junior debtor-in-possession financing provided by Angelo, Gordon and Tennenbaum Capital Partners two large holders of EaglePicher's 9.75% senior notes remains unchanged.
The original Goldman deal, which converts into exit financing when the company emerges from bankruptcy, originally consisted of a $150 million first-lien term loan priced at LIBOR plus 4% and a $75 million second-lien term loan priced at LIBOR plus 7.5%. The credit facility also consisted of a $40 million revolver and a $30 million letter of credit, both priced at LIBOR plus 4%. The new financing replaces $220 million of pre-petition debt, priced at Prime plus 3 1/2% and a $65 million debtor-in-possession loan priced at LIBOR plus 3 1/2%. Harris Trust and Savings Bank led the previous pre-petition debt and the debtor-in-possession financing.
Competitive pricing helped Goldman Sachs snap up EaglePicher's exit financing in the first place, said Douglas Laux, senior v.p. and cfo of EaglePicher. Laux said he approached several banks for the new credit and Goldman offered the best terms. "It is a competitive landscape," he noted. "We go for the best pricing." As of last week, Harris Bank was not going to be part of the new credit. The cfo was unavailable to comment on the reworking of the deal. The new credit facility and debtor-in-possession financing will convert into equity when the company comes out of bankruptcy, which it expects to do in March or April next year.
EaglePicher Holdings and its U.S. subsidiaries filed for chapter 11 in the U.S. Bankruptcy Court in the Southern District of Ohio in Cincinnati on April 11, 2005. The company is a maker and marketer of technology and industrial products and services for space, defense, environmental, automotive, medical and pharmaceutical products.