Delphi secures fourth amendment to DIP loan accommodation agreement

By Caroline Salls

Pittsburgh, June 2 - Delphi Corp. has entered into a fourth amendment to the accommodation agreement with its debtor-in-possession facility lenders, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Under the fourth amendment, the accommodation period will terminate on June 9 if a majority of the tranche A and tranche B DIP lenders and a majority of all lenders who signed the accommodation agreement do not notify Delphi by June 8 that its term sheet outlining a resolution of issues related to General Motors Corp's contributions is satisfactory.

The company was previously required to deliver the term sheet to the DIP lender agent by May 21.

In addition, an event of default will occur under the accommodation agreement if Delphi files any motion to obtain financing with a senior or equal priority to the DIP loan claims.

The fourth amendment also postpones the company's deadline for making interest payments on the tranche C term loan to June 8.

These interest payments will be used to repay principal amounts outstanding on the tranche A and tranche B term loan portions of the DIP facility.

As previously reported, the DIP lenders have agreed to allow Delphi to continue to use the proceeds of the DIP facility and to forbear from exercising their default-related rights until June 30.

Delphi said there is $230 million outstanding under the tranche A facility, $311 million outstanding under the tranche B term loan and $2.75 billion outstanding under the tranche C term loan.

If specified accommodation agreement milestones are not met, Delphi would be required to apply the $47 million currently held as cash collateral to pay down part of the tranche A and tranche B loans.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-44481.

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