RCS Capital Corporation (NYSE: RCAP) entered into an agreement with a group of lenders and Barclays Bank PLC to provide funding for the company’s continued operations while in bankruptcy, according to a filing with the Securities and Exchange Commission.
The super-priority secured debtor-in-possession term loan agreement provides for a $100 million loan facility, with $25 million in initial commitments and $75 million in delayed draw commitments.
The funds will be used to provide working capital for the company and certain subsidiaries; to fund interest, discount, fees and other payments; and to fund Cetera’s advisor retention loans of up $50 million.
The court approved the credit facility on an interim basis, authorizing the company to make an initial borrowing of up to $25 million.
The term of the credit facility expires on the effective date of the company’s plans of reorganization or August 8, 2016, whichever comes first.
The interest rate is 8 percent per year, which will be increased to 10 percent per year if a payment default or an event of default occurs.
Barclays Bank PLC will serve as administrative agent, collateral agent, sole syndication agent, sole book-runner and sole lead arranger.
As reported by The DI Wire earlier this month, RCS Capital filed for Chapter 11 bankruptcy as part of its previously announced strategy to transform brokerage firm Cetera Financial into a private retail business. The process is expected to conclude in May 2016.
According to the bankruptcy filing, the company listed assets of $1.98 billion and debts of $1.39 billion.