Dura postpones $425 million exit facility, will evaluate financing strategy next year

By Sara Rosenberg

New York, Dec. 13 - Dura Automotive Systems Inc. has decided to postpone its $425 million senior secured exit financing credit facility as a result of unfavorable market conditions, according to a company news release.

The company also said that it will evaluate its financing strategy early in 2008, with a plan for emergence as soon as practicable.

The pulled credit facility consisted of a $125 million three-year ABL revolver, a $225 million three-year first-lien term loan B and a $75 million 31/2-year second-lien term loan.

Late last week, pricing on the first-lien term loan B had been flexed up to Libor plus 625 bps from original talk at launch in the Libor plus 550 bps area, pricing on the second-lien term loan had been flexed up to Libor plus 925 bps from original talk in the Libor plus 850 bps area, and the original issue discount on both the first- and second-lien term loans had been increased to 93 from the original offer of 99.

The ABL revolver was being marketed with price talk of Libor plus 250 bps throughout the syndication process.

The first-lien term loan carried call protection of 102 in year one and 101 in year two, and the second-lien term loan was non-callable for one year, then at 102 in year two and 101 in year three.

Goldman Sachs and Barclays Capital were acting as the lead banks on the deal.

Proceeds from the exit facility, combined with a rights offering, were going to be used to repay the company's debtor-in-possession facility and pre-bankruptcy second-lien term loan and to fund plan distributions.

"The credit markets have continued to move against us these past few weeks and the financing terms available in this market are not acceptable to the company," said Larry Denton, chairman and chief executive officer, in the release.

"While the delay in exiting bankruptcy is regrettable, we are intent on achieving the most favorable financing terms possible so that Dura emerges from Chapter 11 with a significantly strengthened balance sheet to support its enhanced competitive position," Denton added in the release.

As a consequence, the company has requested the bankruptcy court continue its confirmation hearing to early next year.

Dura is a Rochester Hills, Mich.-based automotive parts maker.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.