first brands dip credit agreement (summary)

overview

this page summarizes salient terms and issues in the senior secured superpriority debtor‑in‑possession (dip) credit agreement for first brands group, llc. the executed document is available locally:

dip credit agreement (pdf): /wiki/news/first-brands/first-brands-dip-credit-agreement.pdf

use this summary as a quick reference only. for definitive terms, consult the agreement and related court orders.

Facility	New money term loans up to $1,100,000,000; roll‑up loans up to $3,300,000,000.
Availability	$500,000,000 interim; $600,000,000 final (court approval required).
Roll‑up ratio	For every $1.00 funded, $3.00 of qualifying prepetition secured claims convert (3:1).
Pricing	SOFR/EURIBOR 10.00% (cash ~1.55% + PIK ~8.45%); Base 9.00% (cash ~1.55% + PIK ~7.45%). Roll‑up: 7.00% / 6.00% (all PIK).
Premiums/Fees	Upfront 5.00%; Anchor 10.00%; Exit 5.00%; Extension 0.75%.
Maturity	Earliest of June 29, 2026; sale close; or plan effective date.
Liquidity	Minimum $50,000,000 maintained at all times.
Budget tests	Approved 13‑week budget; cumulative variance bands ~15–20%; weekly variance reporting.
Use of proceeds	Working capital, case administration, repayment of $24.5m bridge facility, and other permitted uses.
Agents	Admin/Collateral: WSFS; Trading Agent: OPY Credit Corp.; Fronting Lender: Morgan Stanley Senior Funding.

parties

borrower: first brands group, llc
parent/guarantors: affiliated first brands debtors as specified in the agreement
administrative and collateral agent: wilmington savings fund society, fsb (wsfs)
trading agent: opy credit corp.
fronting lender: morgan stanley senior funding, inc. (initial lender)
lenders: eligible financial institutions party to the agreement (new money and roll‑up)

facility structure

new money term loans: aggregate principal up to $1,100,000,000
- interim availability: up to $500,000,000 upon entry of the interim order
- final availability: up to $600,000,000 upon entry of the final order
roll‑up loans: up to $3,300,000,000 (conversion of certain prepetition secured claims)
- roll‑up mechanic: for every $1.00 of new money funded, $3.00 of qualifying prepetition secured claims are exchanged into roll‑up loans (3:1 ratio)

economics

interest rates (illustrative structure shown below; see agreement for exact definitions and calculations):
- new money term loans
  - sofr/euribor: 10.00% (e.g., ~1.55% cash + ~8.45% pik)
  - base rate: 9.00% (e.g., ~1.55% cash + ~7.45% pik)
- roll‑up loans
  - sofr/euribor: 7.00% (all pik)
  - base rate: 6.00% (all pik)
- default rate: applicable rate + 2.00% per annum upon event of default

premiums and fees

upfront premium: 5.00% of new money term commitments (paid in kind)
anchor premium: 10.00% of new money term commitments to allocation parties (paid in kind)
exit premium: 5.00% of then‑outstanding term loans (cash, on prepayment or maturity)
extension premium: 0.75% of outstanding term loans (upon certain extensions)

maturity and milestones

maturity: earliest of (i) june 29, 2026 (subject to extension as provided), (ii) sale closing of substantially all assets, or (iii) effective date of a confirmed chapter 11 plan
milestones (examples; see order/credit agreement for full list):
- interim order: within 5 business days of petition date
- final order: within 45 days of petition date
- business plan and restructuring support agreement: within 30 days of petition date
- quality of earnings report: within 75 days of petition date

use of proceeds and budgets

uses include: working capital, administration of the chapter 11 cases, repayment of the prepetition $24.5m bridge facility, and other general corporate purposes consistent with orders
approved 13‑week budget with cumulative variance tests (typical bands ~15–20% for receipts/disbursements); weekly reporting of variances
minimum liquidity covenant: maintain at least $50,000,000 at all times
governance: borrower to appoint/maintain a cro acceptable to required lenders

key covenants (illustrative)

negative covenants include limitations on: incurrence of additional liens/indebtedness; investments and restricted payments; asset sales outside permitted baskets; and affiliate transactions beyond specified allowances

events of default (illustrative)

failure to satisfy milestones
variance breaches under the approved budget beyond permitted tolerances
appointment of a trustee/examiner with expanded powers
dismissal or conversion of the chapter 11 cases
proposal of a plan not providing for payment in full in cash of dip obligations (absent lender consent)
debtor challenge to the validity/priority of prepetition secured claims exchanged into roll‑up loans

cross‑links

sources & dockets → /wiki/news/first-brands/sources
risk memo (rolling) → /wiki/news/first-brands/memo
timeline → /wiki/news/first-brands/timeline
exposures dataset → /wiki/news/first-brands/exposures
counterparty network visualization → /wiki/news/first-brands/diagrams

notes on interpretation

this is a neutral summary prepared for quick reference. confirm every term against the dip credit agreement pdf and the interim/final court orders governing the facility.