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Asarco gets interim approval to use $20 million of $75 million DIP
By Caroline Salls
Pittsburgh, Oct. 19 - Asarco LLC obtained interim approval to use up to $20 million of a $75 million revolving line of credit debtor-in-possession facility from The CIT Group/Business Credit Inc. that includes $50 million for letters of credit, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.
The revolving line of credit on the final DIP can be increased to $150 million. The actual amount that Asarco can borrow will depend on the amount of inventory and accounts receivable.
The initial borrowing base will be subject to an availability reserve of $10 million at all times.
Interest will be Libor plus 250 basis points. If the revolving line of credit is increased above $75 million, the interest rate margins on the entire facility can be increased by not more than 75 bps.
The letter-of-credit fee is 250 bps.
Maturity will be the earliest of 24 months after the bankruptcy filing date, upon the sale of all of Asarco's assets, the effective date of a plan of reorganization, conversion of the case to Chapter 7 bankruptcy, upon dismissal of the bankruptcy case or upon an event of default.
A hearing on final DIP approval is scheduled for Nov. 28.
Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9. Its Chapter 11 case number is 05-21207.
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