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O'Sullivan gets final approval for $35 million DIP
By Caroline Salls
Pittsburgh, Nov. 9 - O'Sullivan Industries Holdings, Inc. received final approval for up to $35 million in debtor-in-possession financing with The CIT Group/Business Credit, Inc. and GoldenTree Asset Management, LP, according to a company news release.
The company will use the new facility to pay off its pre-bankruptcy credit agreement and to support ongoing operations.
The DIP includes a revolving credit facility of up to $30 million, with a $20 million letter-of-credit subline, from CIT. The DIP also will include an up to $5 million term loan from GoldenTree.
The term loan, which essentially will serve as a backstop for the revolver, will be triggered if availability under the revolver is less than $2.6 million or the total amount of loans outstanding under the revolver, undrawn letters of credit, reimbursement obligations under letters of credit on which demand for payment has been made and if the face amount of letters of credit authorized by CIT exceeds $29.5 million.
Interest on the revolver will be Libor plus 400 basis points through April 1. After that, the revolver interest will be based on excess availability.
If the average borrowing availability for a three-month period is $10 million or more, the interest rate will be Libor plus 300 bps; if the availability is between $7.5 million and $9.99 million, the interest will be Libor plus 350 bps; if the availability is between $5 million and $7.49 million, the interest will be Libor plus 400 bps and if the availability is less than $5 million, the interest will be Libor plus 450 bps.
Interest on the term loan will be Libor plus 850 bps.
The revolver line-of-credit fee is 50 bps, and the letter-of-credit fee is Libor plus 25 bps.
O'Sullivan, a Lamar, Mo., manufacturer of ready-to-assemble furniture, filed for bankruptcy Oct. 14 in the U.S. Bankruptcy Court for the Northern District of Georgia. Its Chapter 11 case number is 05-83076.
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