The company emerged from bankruptcy on March 5, restructuring its bank debt into a new facility without paring down senior creditor claims. "The senior debt holders were kept at 100 cents on the dollar," explained Norman. The company had about $418 million in senior debt by the end of the third quarter.
Polymer Group has a special program with MatlinPatterson Global Opportunities Partnerswhereby, in the event the company is unable to meet certain covenants under its credit facility, Polymer will be able to tap a $25 million letters of credit facility provided by the firm to repay debt under the credit facility. MatlinPatterson owns roughly two-thirds of Polymer's stock. "In support of the company they offered the $25 million letters of credit," Norman explained. If Polymer Group needed to draw on the letters of credit, the money would be used to pre-pay the senior lenders. MatlinPatterson would then be entitled to 10% in senior subordinated notes due 2007 equal to the amount drawn under that facility.