Madison Square Boys & Girls Club to seek OK of alternative DIP loan

By Sarah Lizee

Olympia, Wash., Oct. 26 – Madison Square Boys & Girls Club, Inc. told the U.S. Bankruptcy Court for the Southern District of New York that it will seek alternative debtor-in-possession financing, according to court documents.

The company has lined up an $11 million DIP term loan with Carver Federal Savings Bank. The facility bears interest at 6¾% for the first two years, to be followed upon a conversion into an exit facility by rate resets on the second- and seventh-year anniversaries of the initial closing.

The debtor will pay a $50,000 breakup fee to SummitBridge National Investments VIII LLC, which was set to be the lender under the $11 million DIP facility the company had originally sought court approval of.

The SummitBridge loan was set to bear interest at a variable rate, subject to a 5% floor, plus 650 basis points per annum. It was also subject to a minimum interest requirement of $300,000.

The 270-day SummitBridge loan also included a 1.5% origination fee, a 1% brokerage fee, a 1% exit fee, a 0.5% extension fee and a $50,000 breakup fee.

The Carver loan includes a 1.5% origination fee, and a 0.5% exit fee.

The New York-based non-profit after-school program provider filed Chapter 11 bankruptcy on June 29 under case number 22-10910.

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