LightSquared seeks interim access to $10 million of DIP financing

By Jim Witters

Wilmington, Del., June 21 - LightSquared Inc. is seeking interim access to $10 million of a $40 million debtor-in-possession financing facility, according to documents filed June 21 with the U.S. Bankruptcy Court for the Southern District of New York.

A hearing on the request is scheduled for noon ET on June 28.

DIP terms

Under the DIP facility, the borrower will be debtor One Dot Six Corp. The guarantors are LightSquared Inc., One Dot Four Corp. and One Dot Six TVCC Corp.

U.S. Bank NA is the administrative and collateral agent.

The final DIP agreement includes an additional $30 million: a $15 million subsequent loan agreement, $5 million as a build-out loan commitment that may be drawn at a later date and $10 million to be funded, if needed, on approval of the DIP lenders.

Interest is 11%, with a default rate of an additional 2% for the first 60 days following a default and an additional 5% thereafter.

The upfront fee is 3%. The exit fee is 2%.

The facility is scheduled to mature on the earliest of: the date on which all of the DIP obligations have been repaid in full; Nov. 15, 2013; the date of the closing of a sale of all or substantially all of the LightSquared assets or stock; the effective date of a confirmed plan of reorganization; or the date of termination of the commitments and/or acceleration of the DIP obligations following a default.

LightSquared, a Reston, Va.-based wholesale-only 4G-LTE network integrated with satellite coverage, filed for bankruptcy on May 14. Its Chapter 11 case number is 12-12080.

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