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ResCap firms revolver at $190 million, term A-1 at $1.06 billion
By Sara Rosenberg
New York, June 1 - Residential Capital LLC (ResCap) finalized tranche sizes under its debtor-in-possession financing facility, setting the revolver at $190 million and the first-out term loan A-1 at $1.06 billion, according to a market source.
At launch, the revolver was talked at $200 million and the term loan A-1 at $1.05 billion, but recently the sizes were under discussion in the range of $175 million to $200 million on the revolver and $1.05 billion to $1,075,000,000 on the term A-1.
The $1.45 billion 18-month DIP loan still includes a $200 million last-out term loan A-2.
Pricing on the revolver and term loan A-1 is Libor plus 375 basis points, and pricing on the term loan A-2 is Libor plus 550 bps. The term loans have a 1.25% Libor floor.
The revolver has a 75 bps unused fee and was offered with a 200 bps upfront fee, the A-1 tranche was sold at an original issue discount of 99, and the A-2 tranche was sold at 98.
Recently, the coupon on the revolver was reduced from Libor plus 400 bps, the coupon on the term loan A-1 from talk of Libor plus 400 bps to 425 bps and the coupon on the term loan A-2 from Libor plus 600 bps.
Also as part of the previous changes, a 50 bps step-up in pricing was added to the DIP facility if ratings by either Moody's Investors Service or Standard & Poor's have not been received by June 30.
Barclays Capital Inc. is the lead bank on the deal.
Proceeds will be used to provide liquidity while the company undergoes its Chapter 11 process that is expected to result in the sale of substantially all of its assets for about $4 billion of proceeds.
The company has already agreed to sell its mortgage origination and servicing businesses to Nationstar Mortgage LLC and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial Inc.
The restructuring plan is expected to be approved by the fourth quarter.
Residential Capital is a New York-based mortgage originator and servicer.
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