Debtor-in-possession loan volume reached US$1.6bn in 1Q16 across 5 deals. That number already surpassed 2015’s entire total of US$930m across 4 deals. And there is more to come. Peabody Energy announced it had secured an US$800m DIP financing from creditors as it filed for Chapter 11 bankruptcy. The deal includes a US$500m term loan and US$100m letter of credit, along with a US$200m bonding accommodation facility.
2016 DIP loan issuance has already surpassed last year’s total
Prior to the filing, Peabody had a roughly US$2.8bn loan across a US$1.65bn revolver and US $1.18bn term loan B. According to LPC Collateral, 108 U.S. CLOs hold a combined US$293bn or 24% of Peabody’s existing term loan. While the majority holds less than 1%, there are 14 CLOs where Peabody’s position accounts for 1% to 1.57% of the current principal balance. DIP loan issuance has largely been muted during the recovery years, only totaling US$11bn for the years 2013-2015, with Texas Competitive Electric Holdings’ 2014 DIP loan comprising roughly 40% of that. More DIP loans are expected this year due to the weakness in the energy sector.
Contact: David Puchowski
David.Puchowski@thomsonreuters.com
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