Asarco asks court to approve $5 million stand-alone letter-of-credit facility

By Jennifer Lanning Drey

Portland, Ore., April 1 - Asarco LLC requested court approval to enter into a $5 million letter-of-credit facility with JPMorgan Chase Bank NA, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

Asarco needs the stand-alone facility because the letter-of-credit sub-facility included in its $75 million debtor-in-possession facility expired on Dec. 15 and was not renewed in light of the company's cash reserves, according to the motion.

The proposed stand-alone letter-of-credit facility is a 12-month credit facility.

Under the agreement, each letter of credit issued under the credit facility would be secured by cash collateral in the amount of 110% of the face amount of the letter of credit.

Asarco will pay a commitment fee of 0.5% and a letter-of-credit fee of 1.5% on the daily maximum amount to be drawn under all letters of credit.

Asarco will pay a $15,000 deposit.

The facility includes a 2% default rate fee.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005. Its Chapter 11 case number is 05-21207.

© 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.