Horsehead creditor Macquarie Bank objects to $90 million DIP facility

By Sheri Kasprzak

New York, Feb. 23 – Horsehead Holding Corp.’s senior lender Macquarie Bank objects to a $90 million debtor-in-possession facility the company is seeking to access, according to a Feb. 22 filing with the U.S. Bankruptcy Court for the District of Delaware.

Horsehead received an interim approval for the 12% DIP facility on Feb. 4. Cantor Fitzgerald Securities is the administrative agent for the facility.

The facility will mature the earliest of the 12-month anniversary of the closing date, the effective date of a Chapter 11 plan, the date all loans become due and payable and the closing of an asset sale.

“Macquarie objects to the proposed final DIP order because it would: (a) allow prepayment of any obligation owed under the DIP facility from the cash collateral or any proceeds from the sale or other disposition of Macquarie’s collateral and use cash collateral without providing adequate protection to Macquarie’s security interests in the collateral; and (b) provide for gross disparity in treatment between Macquarie and other creditors. Accordingly, Macquarie requests that the court deny the DIP motion unless the final DIP orders provides (a) adequate protection for Macquarie’s security interest in the collateral as requested below and in the adequate protection motion; and (b) equitable treatment of Macquarie,” the objection said.

Macquarie is Horsehead’s senior secured lender holding claims in excess of $33 million.

Macquarie’s objection states the DIP facility would “effectuate a de facto non-consensual priming of Macquarie’s senior security interests. The proposed final DIP order would also fail to provide for the payment of interest, fees and expenses to which Macquarie is entitled under the bankruptcy code and the Macquarie credit agreement.”

Headquartered in Pittsburgh, Horsehead is the parent company of Horsehead Corp., a U.S. producer of specialty zinc and zinc-based products and a recycler of electric arc furnace dust. The Chapter 11 case number is 16-10287.

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