Tower's unsecured creditors oppose DIP financing

By Ellen Chang

Houston, Feb. 25 - Tower Automotive, Inc.'s official committee of unsecured creditors said the proposed debtor-in-possession financing should not be given final approval, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said it objects to a number of provisions of the DIP facility. Among its criticisms, it said the adequate protection provisions are "excessive" and argued that the agent no longer needs to be given discretion to alter the terms since the loan has been successfully syndicated, the filing said.

Tower Automotive received interim approval for its debtor-in-possession financing facility on Feb. 4, giving it access to $125 million of the $725 million commitment.

A hearing on final approval is scheduled for Feb. 28.

The DIP facility is via JPMorgan as lead bank.

The DIP runs for two years and, when fully approved, will include $300 million in a revolving credit facility and a $425 million term loan.

The interest rate is Libor plus 275 basis points for the revolver and Libor plus 375 basis points for the term loan.

There is a 50 basis point fee on the unused amount. Tower will also pay an upfront fee of 1.50%.

The court also approved a back-stop commitment from Silver Point Finance, LLC for the pre-bankruptcy second-lien loans. Silver Point is offering to buy the loans of any second-lien lenders that no longer wish to participate at par plus accrued interest. Silver Point will receive a $5.425 million structuring fee.

Tower filed for Chapter 11 on Feb. 1. Its case number is 05-10578.

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