AbitibiBowater debtors look to pay down DIP loan, extend maturity

By Caroline Salls

Pittsburgh, June 30 - AbitibiBowater Inc. requested court approval to amend the Bowater debtor-in-possession facility to allow the Bowater debtors to pay the loan down to $40 million from $206 million and extend the maturity to Dec. 31, 2010 from Oct. 21, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

By paying down a significant portion of the DIP facility, the company said the Bowater debtors will save $4 million through Sept. 30.

The Bowater debtors have agreed to pay a $1.03 million amendment fee.

AbitibiBowater said the debtors decided to pay down the DIP loan because of improving market conditions and operating performance.

The company said the maturity extension would give the debtors access to the financing through the duration of their bankruptcy cases.

The interest rate was also reduced to Libor plus 600 basis points with a 2% Libor floor, and the need for an 18-month extension option has been eliminated.

A hearing is scheduled for July 15.

AbitibiBowater, a Montreal-based producer of newsprint, commercial printing papers, market pulp and wood products, filed for bankruptcy on April 16, 2009. Its Chapter 11 case number is 09-11296.

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