Bayonne Medical gets court OK to raise borrowing cap on DIP facility

By Reshmi Basu

New York, Aug. 21 - Bayonne Medical Center received approval to increase the borrowing cap on its interim DIP financing to $19 million from the U.S. Bankruptcy Court for the District of New Jersey, according to a person familiar with the deal.

According to a Tuesday filing, the four interim hearings have so far authorized the company to use up to $19 million of the $30 million in DIP financing it originally requested when it filed for bankruptcy in April.

The fifth interim hearing is scheduled for Sept. 18.

As previously reported, proceeds of the DIP facility will be used to satisfy working capital and operating requirements.

Maturity will be the earliest of 30 days after the interim approval if a final order has not been entered, two years from closing, upon the sale of substantially all company assets and upon the effective date of a plan of reorganization or liquidation.

Interest will be Libor plus 400 basis points.

Bayonne Medical Center will pay an arrangement draw fee of 0.75% of the total commitment, a commitment fee of 0.50% of the daily average unused portion of the DIP facility and a $10,000 administration fee.

The Bayonne, N.J., medical center filed for bankruptcy on April 16. Its Chapter 11 case number is 07-15195.

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