Saks Global Plan/DS Contemplate $500M Incremental Exit Financing, Provide General Contours of DIP Claims Treatment

Legal Analysis: Cathy Ta Credit Research: Krishan Sutharshana, CFA Relevant Documents: Plan Disclosure Statement / RSA DS Approval Motion Late yesterday night, April 5, the Saks Global debtors filed their first plan of reorganization and disclosure statement revealing certain terms of their restructuring support agreement with an ad hoc group of senior secured noteholders, referred to as consenting DIP term loan lenders. Although the RSA is attached to the DS, the plan term sheet and a new capital commitment letter for $500 million in incremental exit financing are not attached. Broadly, the plan contemplates $500 million in incremental exit financing, which certain consenting DIP term loan lenders have severally and not jointly committed to provide and may be in the form of first lien debt and/or preferred equity. The plan would also convert first-out DIP term loan claims ($1 billion in principal before PIK interest, fees and premiums) into an undefined amount of take-back debt and take-back preferred equity. However, the principal amount of take-back debt would be equal to $750 million less the amount of incremental debt and the amount of take-back preferred equity would be equal to the outstanding amount of first-out DIP term loan claims less the[...]