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DIP Loan for Telecom assets in Virginia

Monday, August 21, 2017
Borrower   Devon Mobile Communications LP. - in bankruptcy.
Loan   A $7,200,000 - three-year loan with interest at 12% for the first year, and 18% for the second and third years. The loan was approved by the bankruptcy court.
Collateral   A lien on 16 PCS licenses and their associated network equipment. Some of these licenses were subject to prior liens to the FCC, but others were unencumbered.
Guarantors   None
Purpose   The Borrower needed the cash to fund the orderly liquidation of its assets. Its affairs had been thrown into chaos by the bankruptcy of Adelphia, its major owner.
Exit strategy   The borrower planned to repay us from proceeds of sales of its PCS licenses. Some of these sales were already agreed and wanted only the approval of the Court.
Outcome   The loan was never fully drawn and was repaid within six months.




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