Constar International receives approval to get interim DIP financing

By Lisa Kerner

Charlotte, N.C., Jan. 16 - Constar International Holdings LLC was granted a final order to obtain interim debtor-in-possession financing, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

A second interim order had extended the period to Jan. 16.

Earlier in the month, the official committee of unsecured creditors asked the court to postpone the Jan. 9 hearing for approval of the company's DIP financing because the committee's formation was delayed due to inclement weather.

As previously reported, in December the debtor was granted interim access to $7 million of the $56 million DIP facility.

Constar obtained a commitment for a $14 million new-money DIP facility and a $42 million roll-up facility.

The lenders on a DIP credit facility for revolving advances are Wells Fargo Capital Finance, LLC and lenders under the company's pre-bankruptcy revolving credit facility. Black Diamond Commercial Finance, LLC is the DIP note agent.

The lenders/purchasers under the $56 million DIP note purchase facility will initially be Sola Ltd., Ultra Master Ltd., Northeast Investors Trust, JPMorgan High Yield Fund and JPMorgan Strategic Income Opportunities Fund.

Each roll-over secured party and shareholder secured party will have the opportunity before entry of the final order to be a purchaser in an amount equal to the greater of a percentage of the new-money facility equal to the term loan debt it holds divided by all term loan debt and an amount agreed to by the initial purchasers.

Interest on the credit facility will be either the base rate plus 225 basis points or Libor plus 325 bps. The note purchase facility will bear interest at 12%.

The DIP financing will mature on the earliest of 45 days after entry of the interim order if the final order has not been entered, Feb. 17, the effective date of a plan of reorganization, the conversion of the Chapter 11 cases and the completion of an asset sale under which all obligations are repaid in full.

Constar, a Trevose, Pa.-based maker of polyethylene terephthalate food and beverage containers, filed for bankruptcy on Dec. 19. The Chapter 11 case number is 13-13281.

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