Hawker Beechcraft creditors committee files opposition to DIP loan

By Lisa Kerner

Charlotte, N.C., May 29 - Hawker Beechcraft, Inc.'s official committee of unsecured creditors filed an objection to the debtors' motion for the entry of interim and final orders authorizing access to its proposed $400 million of debtor-in-possession financing, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The final hearing is scheduled for May 30.

While the committee does not object to the debtors' need for DIP financing, it wants the final DIP order and/or the DIP credit agreement, as appropriate, revised to address certain objections.

According to the filing, the creditors believe the debtors "should not be permitted to skew the balance decidedly in favor of" the DIP lenders and the prepetition lenders "by granting them more protection than they may be entitled," to the detriment of the debtors and the unsecured creditors.

On May 7, the court authorized Hawker Beechcraft to borrow up to $300 million under the DIP financing facility.

As previously reported, Credit Suisse AG, Cayman Islands Branch is the administrative agent and collateral agent for the DIP facility.

The facility consists of $400 million in delayed-draw loans, a portion of which may be applied to provide cash collateral for the issuance of letters of credit with a total maximum face amount of up to $75 million and cash collateralized in an amount equal to 104% of the face amount.

The DIP loan termination date will be the earliest of Dec. 15, 2012, the 35th day following the entry of the interim order unless the final order has been entered, the date of acceleration of any outstanding borrowings under an event of default, the first business day after the interim order expires or is terminated unless the final order has taken effect by then, conversion or dismissal of the Chapter 11 cases and the effective date of a plan of reorganization.

The drawn interest spread on the delayed-draw loan will be Libor plus 800 basis points with a 175 bps Libor floor. A 300 bps original issue discount will be paid in full at closing based on the total commitment.

Hawker Beechcraft, a Wichita, Kan.-based manufacturer of business, special mission, light attack and trainer aircraft, filed for bankruptcy on May 3. The Chapter 11 case number is 12-11873.

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