Federal-Mogul requests approval to increase DIP to $775 million, extend maturity

By Caroline Salls

Pittsburgh, Oct. 26 - Federal-Mogul Corp. requested approval of an amendment to its debtor-in-possession facility from Citicorp USA, Inc. that would increase the size of the facility to $775 million from $500 million, extend the maturity and permit the company to implement a U.K. settlement agreement, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company wants to extend the DIP's maturity to the earlier of the consummation of its plan of reorganization or Dec. 9, 2006 from its current Dec. 9 expiration.

According to the motion, the company needs additional liquidity to fund a potential "top-up offer," which would allow it to offer intercompany loan notes owned by U.K. debtor T&N Ltd. as a central feature of the comprehensive settlement agreement between Federal-Mogul, T&N and other co-proponents of Federal-Mogul's plan of reorganization.

The amended DIP would be made up of a $500 million senior secured revolving credit facility, which includes a $375 million letter-of-credit sublimit, and a $275 million senior secured term loan facility.

Interest on the revolver would be Libor plus 225 basis points and interest on the term loan would be Libor plus 250 bps.

Interest on the unused portion of the revolver would be 0.375%.

Federal-Mogul, a Southfield, Mich.-based auto parts manufacturer, filed for bankruptcy on Oct. 1, 2001. Its Chapter 11 case number is 01-10578.

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