Dana Credit to make $155 million initial payment to forbearing noteholders on Dec. 28

By Caroline Salls

Pittsburgh, Dec. 21 - Dana Credit Corp. will make the $155 million initial quarterly payment on Dec. 28 that is due to forbearing noteholders under its forbearance agreement, according to an 8-K filing with the Securities and Exchange Commission.

According to the filing, the payment will be made using proceeds from the sale of Dana Credit's assets.

The $155 million payment will include a $125 million principal payment, reducing Dana Credit's current outstanding debt to $267 million from $392 million.

As previously reported, the forbearance agreement is part of a settlement agreement between Dana Credit and parent Dana Corp., which was approved by the U.S. Bankruptcy Court for the Southern District of New York on Nov. 29.

The filing said the settlement agreement and related forbearance agreement were finalized on Dec. 18.

Dana Corp., a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets, filed for bankruptcy on March 3, 2006. Its Chapter 11 case number is 06-10354.

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