May 31, 2012 / 1:45 PM / 7 years ago

RLPC: ResCap cuts DIP pricing

NEW YORK, May 31 (Reuters) - Barclays cut pricing on Residential Capital’s $1.45 billion debtor in possession (DIP) facilities amidst strong investor demand.

The DIP facility will be modified to consist of a $175-200 million revolver, a $1.05-1.075 billion term loan A-1, and a $200 million term loan A-2. The DIP facility previously pegged the revolver at $200 million and the term loan A-1 at $1.05 billion.

The revolver upfront fee has been raised to 200bp from 100bp. The proposed pricing on the revolver loan is now 375bp over Libor, down from 400bp over Libor, with a 75bp unused line fee unchanged.

The A-1 and A-2 term loans remain offered at 99 and 98, respectively. Pricing on the A-1 loan, which had been in the 400-425bp over Libor range, has been moved lower to 375bp over Libor while the A-2 loan will now have a spread of 550bp over Libor, down from 600bp over Libor. The terms loans benefit from a 1.25 percent Libor floor as well. Barclays is the sole bookrunner on the deal.

The DIP will provide servicing advances related to the company’s servicing agreements, refinance the GSAP facility and the BMMZ repurchase facility, and fund ordinary course operating expenses. The GSAP and BMMZ facilities are prepetition obligations primarily financing servicing advances and asset repurchases with third parties, respectively. There was $662 million outstanding under the GSAP facility and $250 million of outstanding under the BMMZ repurchase facility at the time of filing.

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