IdleAire enters noteholder-funded credit facility; loan could be converted to bankruptcy financing

By Caroline Salls

Pittsburgh, April 30 - IdleAire Technologies Corp. has entered into a new credit facility that could be converted into a debtor-in-possession facility if the company files for Chapter 11 bankruptcy, according to an 8-K filed with the Securities and Exchange Commission.

In addition, the company said it would not have to pay a commitment termination fee on the new facility if it files for Chapter 11 bankruptcy and either the credit facility was converted into a DIP facility or lenders holding at least 75% of the loans under the credit facility agreed to provide DIP financing to the company.

According to the 8-K, the holders of the company's senior secured discount notes due 2012 are the lenders of the new credit facility. Wells Fargo Bank, NA is the administrative agent and collateral agent.

The amount of the credit facility is the lesser of $25 million or approved disbursements less available cash at the time of each borrowing.

All outstanding loans under the credit facility bear interest at 12%, payable in kind monthly with a cash pay option.

The credit facility is scheduled to mature on May 2.

If it does not file for bankruptcy and convert the credit facility, IdleAire will be required to pay a commitment termination fee equal to the greater of 10% of the total principal amount of all outstanding loans at the time of termination and $1 million. The fee cannot exceed $2 million.

As a condition to the credit facility, the company has hired turnaround management and restructuring consulting firm CRG Partners Group, LLC.

IdleAire said it also entered into a security agreement in favor of collateral agent Wells Fargo Bank under which all amounts owed under the credit facility are secured by perfected security interest in and liens on substantially all of the personal property assets of the company.

The company said the liens securing the 13% senior secured discount notes are junior to the liens granted under the credit facility.

As of April 30, IdleAire said it had borrowed $3.7 million under the credit facility, with the proceeds being used for general corporate purposes.

Based in Knoxville, Tenn., IdleAire is a privately held research and development company that provides products and services for the long-haul trucking freight industry.

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