The bankruptcy court overseeing the Chapter 11 proceedings of Patriot Coal gave final approval to the company’s $802 million DIP facility, according to an order filed with the court in Manhattan on Aug. 3.

The facility gained interim approval on July 11, which gave the company access to $677 million of the financing. The Manhattan bankruptcy court held a hearing for final approval on Aug. 2.

As reported, the $802 million DIP facility would be comprised of a “first-out” facility consisting of a $125 million asset-based revolver (a portion of which would be used to roll up existing direct lending and letter of credit commitments) and a $375 million term loan, and a $302 million “second-out” facility into which letters of credit currently outstanding under the company’s existing credit facility would be rolled. Overall, the facility would provide Patriot Coal with $377 million of roll-up financing and $425 million of new money.

The interim approval included the second-out facility, the entire revolver, and access to $250 million of the term portion, so final approval means that the remaining $125 million of the term loan will become available.

As also reported, the loan allocated Friday afternoon and ran up to 101/101.5, from issuance at 98.5 and an opening market of 100.125/100.625, according to sources. The new-money loan, which sources say was several times oversubscribed, was priced at L+775, with a 1.5% LIBOR floor. It matures 15 months from closing, with an optional three-month extension.

At 98.5, the loan yields about 10.98% to maturity.

As reported, Citigroup, Barclays, and Bank of America Merrill Lynch earlier this week tightened pricing on the first-out term loan. For reference, it was originally talked at L+800, with a 1.5% LIBOR floor and 98 offer price. – Staff reports