McLeodUSA gets interim OK to use $20 million of DIP; plan confirmation hearing Dec. 15

By Caroline Salls

Pittsburgh, Oct. 31 - McLeodUSA Inc. obtained interim approval to use up to $20 million of its proposed $50 million in debtor-in-possession financing from JPMorgan Chase Bank, NA as part of approval of its first-day motions, according to a company news release.

The court also scheduled a hearing for confirmation of the company's pre-packaged plan of reorganization for Dec. 15.

The DIP will be replaced upon its exit from bankruptcy with a new $50 million revolving credit facility.

The DIP facility will include $15 million for letters of credit.

The DIP will mature at the earliest of six months; upon the acceleration of the loans; upon the consummation of the plan of reorganization and 45 days after entry of the interim order.

Interest will be Libor plus 400 basis points. The letter-of-credit fee will be 400 basis points. The unused portion fee will be 50 basis points.

The company also obtained approval to pay trade creditors in the ordinary course of business and pay employee wages and benefits in the ordinary course of business.

McLeodUSA, a Cedar Rapids, Iowa-based integrated communications services company, filed for bankruptcy on Oct. 28 in the U.S. Bankruptcy Court for the Northern District of Illinois. Its Chapter 11 case number is 05-63230.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.