Dan River has received final court approval of a $145 debtor-in-possession (DIP) facility that will provide cash for operations and servicing post-petition obligations, said Denise Laussade, v.p. of finance at Dan River. The manufacturer and marketer of textile products filed for bankruptcy in March to fix an over-leveraged balance sheet. "We hope to emerge by the end of the year," Laussade noted.
Deutsche Bank is the agent in the DIP facility, Fleet Capital is the syndication agent while Wachovia Securities is documentation agent. Laussade said the DIP facility has been provided by substantially the same bank group as the pre-petition facility. The DIP facility consists of a $35 million term loan and a $110 million revolver priced at LIBOR plus 3 1/2% and LIBOR plus 3 3/4%, respectively. The facility also has a 50 basis point fee on the unused portion and a fee of 3 1/2% for outstanding letters of credit.
Deutsche Bank is the agent bank in the company's pre-petition financing, which consisted of a $40 million, five-year term loan and $160 million, five-year revolver, arranged in April last year. This credit refinanced existing debt alongside an offering of $157 million of 12 3/4% notes.
Shortly afterwards Dan River twice entered into amendments with the lenders to avoid breaking the leverage covenants in the credit agreement. The loan did not actively trade when the company sought amendments, as the asset-based deal was closely held by the lending group, who were still looking for par, explained one trader (LMW, 10/19). At the time of the filing, the lenders were owed $34.3 million from the term loan and $85 million from the revolver. The "A" loan is currently quoted at 93 1/2-95 by Mark-it Partners/LoanX. The bonds plummeted to the 39-45 range before Dan River filed for bankruptcy.