Kodak Completes Syndication of $695 Million in Exit Financing

   By Yogita Patel 
 

Eastman Kodak Co. (EKDKQ) has completed the syndication of $695 million in bankruptcy-exit financing, bringing the iconic company one step closer to emerging from Chapter 11 protection.

The financing--which includes a $420 million first-lien term loan and a $275 million second-lien term loan--was arranged by J.P Morgan Chase & Co. (JPM), Barclays PLC (BCS) and Bank of America Merrill Lynch. The banks have also agreed to arrange $200 million in asset-backed financing, $130 million of which they would provide.

Kodak estimates that the financing will save it $25 million in interest in the first year of post-bankruptcy operations.

Kodak said it will file the necessary loan documentation with the U.S. Bankruptcy Court in Manhattan "in the coming days."

Rochester, N.Y.-based Kodak filed for Chapter 11 protection in January 2012 after years of facing challenges from competitors amid the rise of digital technology. Kodak laid the groundwork for an exit strategy earlier this year with the sale of a trove of digital-imaging patents for $527 million--a price far lower than what the company had hoped to get from the intellectual property but an important step that moved forward its bankruptcy case by settling patent litigation that could have further the reorganization process.

Kodak is hoping to leave bankruptcy next month and will use the loans, cash on hand and proceeds from a $406 million rights offering to repay bondholders. A group of key creditors will control the reorganized company with an 85% stake.

Kodak plans to reinvent itself as a commercial-imaging firm that specializes in digital printing and motion-picture film.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com.)

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