Verso secures OK of $600 million in DIP financing, first-day motions

By Caroline Salls

Pittsburgh, March 2 – Verso Corp. received final court approval to obtain up to $600 million in debtor-in-possession financing, according to a company news release.

As previously reported, the Verso debtors obtained a commitment for a $100 million asset-based DIP revolving credit agreement, and the NewPage Corp. debtors obtained a commitment for up to $675 million in DIP financing, including $500 million in new-money financing.

Citibank, NA is the agent for the Verso DIP facility.

Interest will be alternative base rate plus 150 basis points for ABR loans and Libor plus 250 bps with a 0% floor for Eurocurrency rate loans.

The facility will mature on the earliest of 18 months from the closing date, the effective date of a Chapter 11 plan and the acceleration of the loans.

The NewPage DIP loan is comprised of a $325 million senior secured asset-based revolving credit facility and a $350 million senior secured term loan facility, consisting of $175 million in new money term loans and a dollar-for-dollar roll up of up to $175 million in loans held by the term lenders under a pre-bankruptcy facility.

Barclays Bank plc is the administrative agent.

Interest on the revolver will be the adjusted base rate plus 150 bps for ABR loans and Libor plus 250 bps for Eurocurrency rate loans, and interest on the term loan will be the adjusted Base rate plus 850 bps for ABR loans and Libor plus 950 bps for Eurocurrency rate loans.

The NewPage facility will mature on the earliest of 18 months after the closing date, the effective date of a Chapter 11 plan, completion of a sale of substantially all of the NewPage debtors’ assets and the acceleration of the loans.

The company said it also received court approval of various first-day motions that will allow it to continue operating its business as it restructures its balance sheet.

Specifically, Verso said the approved first-day motions authorize it to continue to pay employee salaries, wages and benefits, make qualified retirement plan payments, honor customer programs and pay suppliers in the ordinary course of business for post-bankruptcy goods and services.

Verso, a Memphis-based producer of printing and specialty papers and pulp, filed bankruptcy on Jan. 26 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 16-10163.

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