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Momentive gets approval for $250 million bridge financing commitment
By Caroline Salls
Pittsburgh, July 18 – Momentive Performance Materials Inc. received court approval to enter a commitment for $250 million of second-lien bridge financing, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.
J.P. Morgan Securities LLC, Citigroup Global Markets, Inc. and Credit Suisse Securities (USA) LLC are the lead arrangers. JPMorgan Chase Bank, NA is the administrative agent.
The bridge financing will be drawn to the extent the Momentive debtors are not able to issue new senior second-priority secured notes in a Rule 144A or other private placement yielding enough total cash proceeds to pay 1.5 lien note claims under the company’s Chapter 11 plan.
Interest for the first three months from the plan effective date will be payable at Libor plus 600 basis points. The spread will increase by 50 bps at the end of each three-month period thereafter.
On the first anniversary of the closing date, any second-lien bridge loan that has not been previously repaid in full will be automatically converted into a senior second-priority secured term loan due eight years after closing.
At any time on or after the conversion date, the loans may be exchanged in whole or in part for senior second-priority secured exchange notes, provided, however, that the reorganized company can defer the first issuance of exchange notes until it receives requests to issue a total of at least $100 million in principal amount of second-lien exchange notes.
The exchange notes will mature eight years from closing.
Momentive, a silicones and advanced materials company based in Albany, N.Y., filed bankruptcy on April 13. The Chapter 11 case number is 14-22503.
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