Collins & Aikman's $470 million "B" loan slowly started to drop and sat between 80-81 last week following syndication of the JPMorgan-led $150 million debtor-in-possession facility. The debt had spiked up to around 84-85.725 on July 25, but has started descending, according to Markit.
"I think there has been some fairly active trading, but I think a lot of people cleared out of [the "B" loan] before they filed for bankruptcy," said one investor who thought the DIP was going well because it has decent terms and is secured by quick assets and receivables. Another investor said it has been down by about five points since they launched the DIP, but he expects it to drop more.
The debt has been all over the board, inching up to 90-92 range from 87-89 just days after the company said it was entering Chapter 11 in May. In late June it dropped to as low as 72 after a private call in which lenders were told EBITDA numbers were moving lower.
The $150 million DIP consists of a $25 million revolver and a $125 million term loan with pricing of LIBOR plus 3% on both tranches. The bank had originally planned to fund $300 million in DIP financing, but dropped it to $150 million for the Troy, Mich., automotive supplier. Instead it is receiving $82.5 million in subordinated DIP financing and $82.5 million in aggregate price increases under certain existing customer contracts. The final court hearing on the customer funding is set for tomorrow. The company is also receiving $30 million unsecured bridge financing previously approved by the Bankruptcy Court. A spokesman for the company declined comment.