July 29, 2018 – Heritage Home Group has requested Court authority to obtain debtor-in-possession (“DIP”) financing from PNC Bank, N.A. in its capacity as administrative agent and collateral agent (the “DIP Lenders”) [Docket No. 11]. The financing motion explains, “The DIP Facility is a senior-secured revolving loan credit facility that provides the Debtors with critical funding, in the aggregate principal amount of up to $98.0 million to fund their operations in accordance with, and subject to, a budget approved by the DIP Lenders (the ‘Budget’). Subject to certain conditions precedent set forth in the DIP Credit Agreement, the Debtors may borrow up to $25.0 million on an interim basis under the DIP Facility following the entry of the Interim Order and up to $98.0 million under the DIP Facility on a final basis following entry of a Final Order….The Debtors seek authorization to enter into the DIP Facility to enable them to continue operating in the ordinary course while they implement sales processes pursuant to section 363 of the Bankruptcy Code….The interest rate on cash borrowings outstanding under the Pre-Petition Credit Agreement is either: a base rate (the greater of the prime rate, Federal Funds Rate plus 0.50%, and LIBOR) or LIBOR plus the applicable margin. The applicable margin for borrowings under the Pre-Petition Credit Agreement ranges from 4.25% to 5.0% for base rate borrowings and 5.25% to 6.0% for LIBOR borrowings.”
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