JPMorgan was syndicating a $150 million Debtor-In-Possession financing for Collins & Aikman last week. The facility consists of a $25 million revolver and a $125 million term loan with pricing of LIBOR plus 3% on both tranches. "I think people are going to be interested, but primarily it is going to be people already in the deal. I don't see a lot of new people coming into the deal," said one investor.
The bank had initially planned to fund $300 million in DIP financing, but dropped it to $150 million for the Troy, Mich., automotive supplier. The company is instead receiving $82.5 million in subordinated DIP financing and $82.5 million in aggregate price increases under certain existing customer contracts, according to an 8K filed with the Securities and Exchange Commission in July. It is also receiving $30 million unsecured bridge financing previously approved by the Bankruptcy Court. The agreement is good until Sept. 30. A timeline has not been established for when the company will emerge from bankruptcy, but it anticipates presenting a business plan before August 31. A spokesman for Collins & Aikman declined comment.
Collins & Aikman debt has been zig-zagging since the company said it was entering Chapter 11 in May. The $470 million "B" loan currently sits in the 83-85 range. Just days after the announcement, the "B" had inched up to the 90-92 range from 87-89 (LMW, 5/20), but in late June nosedived to as low as 72 after a private call in which lenders were told EBITDA numbers were moving lower (6/29).
