American Color Graphics gains access to $135 million of DIP

New York, July 16 - American Color Graphics, Inc. said it obtained approval for all of the first-day motions in its Chapter 11 case, including interim approval to access $135 million of its debtor-in-possession credit facility.

In addition, the company is now able to pay pre-petition and post-petition employee wages, salaries, and benefit, pay trade creditors in the ordinary course of business, and continue all customer programs.

American Color has received a commitment for up to $135 million in debtor-in-possession financing from Bank of America, with a $20 million letter-of-credit subfacility.

American Color's DIP facility will mature on the earlier of 60 days after the bankruptcy filing date or on the effective date of a plan of reorganization.

Interest will be Base rate plus 500 bps.

American Color Graphics and Vertis Communications made pre-packaged Chapter 11 filings on Tuesday in the U.S. Bankruptcy Court for the District of Delaware to complete their planned merger.

American Color Graphics is a Brentwood, Tenn., pre-media and print company. Its Chapter 11 case number is 08-11467.

Baltimore-based Vertis provides print advertising and marketing solutions. Its Chapter 11 case number is 08-11460.

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