Aleris gets court OK of $500 million exit loan commitment letter

By Caroline Salls

Pittsburgh, May 10 - Aleris International, Inc. obtained court approval to enter into a commitment letter for a proposed $500 million first-lien senior secured asset-based exit facility, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The administrative agent will be Bank of America, NA. Banc of America Securities, LLC and J.P. Morgan Securities Inc. are the joint lead arrangers, and Banc of America Securities, J.P. Morgan Securities, Barclays Bank plc, Deutsche Bank Securities Inc. and UBS Securities LLC are the joint bookrunners.

According to the motion, the $500 million loan will include $75 million for issuance of letters of credit and $30 million for swingline loans.

The facility will mature 4¼ years from the closing date, which will be the plan of reorganization effective date.

The interest rate will range from Libor plus 300 basis points to Libor plus 375 bps, depending on a pricing grid based on average excess availability.

Aleris must pay up to $16 million in fees associated with the structuring, underwriting, commitment and arrangement of the facility.

The commitment will expire at 5 p.m. ET on Aug. 6 if the plan has not taken effect and financing is not completed by that time.

Aleris, a Beachwood, Ohio-based producer of aluminum rolled products and extrusions, aluminum recycling and specification alloy, filed for bankruptcy on Feb. 12, 2009. Its Chapter 11 case number is 09-10478.

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