By Dow Jones Business News,
January 08, 2014, 01:00:00 PM EDT
By Peg Brickley
Banks are lined up to provide up to $1.55 billion worth of loans to W.R. Grace & Co. ( GRA ) when the specialty chemical
company ends a dozen-year stay in bankruptcy at the end of this month, court papers say.
The financing, which carries some $21.25 million worth of fees, is being coordinated globally by affiliates of Goldman
Sachs Group Inc. ( GS ) and Deutsche Bank AG ( DB ). It involves affiliates or units of Bank of America Corp. ( BAC )
Citigroup Inc. ( C ), HSBC Holdings PLC (HSBC), Commerzbank AG (CRZBY), KeyBanc Capital Markets Inc., PNC Financial
Services Group Inc. (PNC) and Sumitomo Mitsui Banking Corp. (J.SMF).
At a Jan. 29 hearing in the U.S. Bankruptcy Court in Wilmington, Del., Grace will seek court authority to enter into
the loan commitments along with other final touches on a Chapter 11 restructuring that will remove from the Maryland
company the threat of billions of dollars worth of liabilities for injuries linked to asbestos, a toxic material used
Bankruptcy exit financing is "likely to include" a $700 million senior secured term loan, a $200 million euro
equivalent senior secured term loan, a $250 million senior secured delayed draw term loan, a senior secured revolving
loan of up to $250 million and a multicurrency senior secured revolving loan of up to $150 million, according to papers
The money will be used to "pay in full all outstanding claims," left at the end of the bankruptcy, such as the $1.1
billion Grace has agreed to pay investors in the bank loans it carried with it into bankruptcy in 2001.
Additionally, there will be cash contributions to the trusts that will pay off the asbestos claims that drove Grace to
seek Chapter 11 protection, as well as money for working capital and other general corporate purposes for Grace.
The revolving loans likely won't be drawn down on the exit date, court papers say, but the money will be there for
Grace, once a prime lawsuit target for victims of asbestos-related disease and now a thriving global specialty chemical
and building material producer with a market capitalization of $7.4 billion.
Grace has been assembling its exit financing package for years, while its Chapter 11 plan worked through a series of
courts. In November 2013, after a federal appeals court in Philadelphia ruled for Grace on a series of appeals of its
confirmed Chapter 11 plan, talks with the banks started up again in earnest, court papers say.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to
Write to Peg Brickley at email@example.com.
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