Article
Majority of First Brands Lenders in Glenn Agre Group Joins Gibson Dunn Majority Group, Participate in Proposed DIP With Backstop Fee to SteerCo Lenders
Holders of a majority of the First Brands loans in an ad hoc group represented by Glenn Agre as counsel have agreed to join an ad hoc group of lenders advised by Gibson Dunn and Evercore that holds more than 90% of the loans and participate in the proposed $1.1 billion DIP, according to sources.
Lenders to about $500 million out of $700 million of the loans in the Glenn Agre group signed onto a nondisclosure agreement and joined the DIP put together by the majority lender group, according to sources. The NDA required signees to not object to the proposed DIP, the sources said.
Lenders in the Glenn Agre group received better economics following negotiations between their counsel and advisors to the majority lender group, according to sources.
The proposed DIP has a 5% to 12% PIK backstop fee to the SteerCo lenders, the sources said. It also allows participants to roll up a portion of their prepetition holdings, the sources said. The proposed DIP previously had a bracketed holdback, which has since been removed, they added.
More lenders are expected to sign the NDA to join the majority group and participate in the proposed DIP, the sources said.
First Brands filed for chapter 11 bankruptcy this morning after a steep and sudden decline in the span of weeks for the auto parts company. First Brands is seeking to jointly administer its chapter 11 cases alongside its special purpose entities, which filed for chapter 11 last week after Octus highlighted the connection between First Brands and Carnaby.
The company is working with Weil Gotshal, Lazard, Alvarez & Marsal, and C Street.
As a part of the chapter 11 filing, First Brands disclosed its organizational chart, as seen below:
The capital structure to First Brands is below:
Register HERE for a webinar on Oct. 8 as Octus unpacks the fallout from First Brands’ bankruptcy. Octus’ latest Private Company Analysis on the First Brands is HERE. A list of CLO lenders to First Brands is HERE.
First Brands, its advisors, Gibson Dunn, Evercore and Glenn Agre did not respond to requests for comment.
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