Answers wins approval of financing, including $25 million term loan

By Caroline Salls

Pittsburgh, April 5 – Answers Corp. obtained final court approval to obtain debtor-in-possession financing, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the financing package consists of a $25 million term loan facility, plus $1.3 million in pre-bankruptcy letters of credit that will be converted into post-bankruptcy letter-of-credit obligations, as well as a bilateral letter of credit facility providing for up to $2 million of letters of credit.

Credit Suisse AG, Cayman Islands Branch is the administrative and collateral agent.

The DIP financing will mature on the earliest of six months from the bankruptcy filing date, the effective date of a Chapter 11 plan, the date the obligations become due because of a default or otherwise and the closing of a sale of all or substantially all of the company’s assets.

Interest will accrue at the Base rate plus 600 basis points with a 2% floor or one-month Libor plus 700 bps with a 1% floor.

The DIP lenders have also agreed to provide the company with $75 million in exit financing.

Answers is a St. Louis-based provider of cloud-based solutions that enhance customer acquisition and brand engagement. It filed for bankruptcy on March 3. The Chapter 11 case number is 17-10496.

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