Aleris granted access to $150 million of DIP financing; final hearing March 11

By Caroline Salls

Pittsburgh, Feb. 13 - Aleris International, Inc. was granted interim approval to use $150 million of its new $1.075 billion of debtor-in-possession financing as part of court approval of its first-day bankruptcy motions, according to a company news release.

The final hearing is scheduled for March 11.

The DIP financing includes a new $500 million term loan and a $575 million revolving credit facility that replaces Aleris' previous revolver.

Proceeds of the DIP financing will be used for the company's normal operating and working capital requirements, including employee wages and benefits, supplier payments, and other operating expenses during the reorganization process.

Deutsche Bank AG New York Branch is the administrative agent, and Deutsche Bank Securities, Inc. is the arranger, bookrunner and syndication agent.

The facility will mature on the earliest of 12 months, the effective date of a reorganization plan and 45 days after the interim order if the final order has not been entered.

Interest on U.S. dollar term loans will be Libor plus 1,000 basis points, with a 3% Libor floor; interest on Euro term loans will be Eurobor plus 600 bps with a 3% Eurobor floor; and interest on the roll-up portion of the term loan facility will be either 12.5% paid in kind or 10% cash, at Aleris' option.

Meanwhile, interest on the ABL facility will be Base rate plus 550 bps, with a 4% floor, for Base rate loans and either Eurodollar rate or Libor plus 650 bps, each with a 3% floor.

In addition, the company obtained court approval to continue payment of wages and health and welfare benefits to employees and to pay vendors and suppliers for goods and services provided on or after the bankruptcy filing.

Aleris said the first-day motions were granted pending review by the official committee of unsecured creditors, which is expected to be formed during the week of Feb. 20, as well as final court approval.

Aleris, a Beachwood, Ohio-based producer of aluminum rolled products and extrusions, aluminum recycling and specification alloy, filed for bankruptcy on Feb. 12 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-10478.

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