Rotech wins approval for $357.5 million exit financing commitment

By Jim Witters

Wilmington, Del., July 29 - Rotech Healthcare Inc. received approval to enter into commitment letters for $357.5 million in exit financing during a July 29 hearing in the U.S. Bankruptcy Court for the District of Delaware.

There were no objections to the commitments.

Under financing commitment letters, the company would obtain a $25 million first-lien senior secured revolving credit facility, a $100 million first-lien senior secured tranche A term loan facility and a $75 million first-lien senior secured tranche B term loan facility.

Rotech also received court approval to enter into a backstop commitment agreement related to a proposed $157.5 million second-priority senior secured term loan facility.

The commitment parties for the first-lien credit facilities are Wells Fargo Bank, NA, Wells Fargo Principal Lending, LLC, some funds and/or accounts affiliated with Capital Research and Management Co. and SPF CDO I, Ltd. The administrative and collateral agent on the first-lien facilities is Wells Fargo Bank. The arranger and bookrunner is Wells Fargo Principal Lending.

The first-lien revolver and tranche A term loan would mature in five years from the plan of reorganization effective date and the tranche B term loan in six years from the effective date.

Interest on the revolver and new tranche A loans would be either Base rate plus 325 basis points or Libor plus 425 bps, at the borrower's option, and interest on the new tranche B loan would be either Base rate plus 775 bps or Libor plus 875 bps, at the borrower's option.

Silver Point Finance, LLC is the administrative agent for the seven-year second-lien term loan, and Wells Fargo is the collateral agent.

The backstop lenders are SPCP Group, LLC, Capital Research and Management Co. and some funds and/or accounts affiliated with Venor Capital Management LP.

Each holder of allowed second-lien notes claims will have the right to participate in the new second-lien term loan.

Interest on the second-lien loan will be either Base rate plus 1,000 bps or Libor plus 1,100 bps, at the borrower's election.

Rotech, an Orlando, Fla.-based provider of home medical equipment and related products and services, filed for bankruptcy on April 8. Its Chapter 11 case number is 13-10741.

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