Borrowers express uncertainty over Lehman honoring undrawn revolver commitments

By Sara Rosenberg

New York, Sept. 17 - Some companies have made a point over the past couple of days to disclose the size of their revolving credit facilities and how much of those commitments come from Lehman Brothers, with those companies indicating that there is uncertainty over whether Lehman would fund those commitments.

Wednesday alone, six companies - including Dynegy Inc., B&G Foods Inc., Team Finance LLC, ArvinMeritor Inc., Kinder Morgan Energy Partners LP and Avago Technologies Finance Pte. Ltd. - disclosed that type of information in filings with the Securities and Exchange Commission, and a couple of other companies made similar filings earlier on in the week.

A market source explained that the influx in filings is a result of doubt regarding whether Lehman would currently fund any revolver draw down request.

"The development with Barclays is certainly a positive to those borrowers who have Lehman in their revolver, but there's a period of transition so there is some uncertainty right now. Should be more clarity when the transaction closes," the source said.

On Wednesday, Dynegy, a Houston-based energy company, said that of its $1.15 billion revolver, Lehman committed to $70 million.

B&G Foods, a Parsippany, N.J., manufacturer and distributor of shelf-stable branded food products, said that of its $25 million revolver, Lehman committed to $3.1 million.

Team Finance, a Knoxville, Tenn., provider of outsourced physician staffing and administrative services, said that of its $125 million revolver, Lehman committed $15 million.

ArvinMeritor, a Troy, Mich., provider of integrated systems, modules and components to the motor vehicle industry, said that of its $700 million revolver, Lehman committed to provide $43 million.

Avago, a Singapore-based supplier of analog interface components for communications, industrial and consumer applications, said that of its $375 million revolver, Lehman committed to $60 million.

And, Kinder Morgan, a Houston-based pipeline company, said that Lehman provides less than 5% of the commitments under its $1.85 billion credit facility, less than 10% of commitments in its joint venture Rockies Express' $2 billion credit facility and less than 10% of commitments in its joint venture Midcontinent Express' $1.4 billion credit facility.

All of these companies said that they do not expect the Lehman commitments, or lack thereof, to have a material impact on their liquidity.

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