Building supply company Wickes has secured a $115 million debtor-in-possession financing from a syndicate led by Merrill Lynch Capital. The new bank line replaces a $100 million DIP that was approved on an interim basis. The additional $15 million is a term loan being provided by a group of lenders including Highland Capital Management and is said to offer a generous spread.
"We can now say to the trade community and all the constituencies that we have permanent debtor-in-possession financing in place," said Fred Kraegel of Wickes' financial advisor Bridge Associates. The syndicate includes LaSalle Bank, Comerica, CIT Financial and Congress Financial. It is the same syndicate of banks that was in the pre-petition debt, Kraegel noted. Wickes had about $57 million of bank debt at the time of the bankruptcy filing, he added. "The creditors committee supported the approval," Kraegel said. "In fact already we're seeing additional creditors now granting the company trade support."
The DIP also consists of a $77.6 million revolver at LIBOR plus 31/4% and a $22.3 million term loan at LIBOR plus 4%. Kraegel said pricing on the $15 million term loan is much higher, but he did not disclose the spread. Wickes filed for bankruptcy on Jan. 20 and put the interim DIP in place on Jan. 21, the permanent DIP was approved March 25. "The pricing was really determined back in January when the interim facility was approved," Kraegel said. "We believe it was the best deal we were able to get at that point in time."