Aleris granted final approval for $1.075 billion DIP financing

By Jennifer Lanning Drey

Portland, Ore., March 18 - Aleris International, Inc. obtained final court approval for its new $1.075 billion debtor-in-possession financing from the U.S. Bankruptcy Court for the District of Delaware, according to a company news release.

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

It will be used to fund the company's normal operating and working capital requirements during the reorganization process.

"The DIP facility enables us to continue to provide our employees with pay and benefits, make post-petition payments to suppliers and continue to satisfy our customer commitments," Steven J. Demetriou, chief executive officer of Aleris, said in the release.

As previously reported, 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 and the effective date of a reorganization plan.

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.

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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