The US Bankruptcy Court gave an order to Avaya, Inc. to obtain DIP financing on a final basis on March 6, 2023. As per the order, the debtor has been authorized to obtain a term loan in the amount of $500 million, where Wilmington Savings Fund Society, FSB acting as the administrative agent. The DIP loan would either carry an interest rate of SOFR plus 8% p.a., along with an additional interest in the event of default.

As per the terms of the DIP agreement, the loan carries a term upfront fee of 4% p.a., put option premium equal to 6% of aggregate principal amount, an exit fee of equal to 1% of the sum of the principal amount, a fronting fee equal to 0.375% of the aggregate commitments as of the closing date. The DIP facility would mature either on March 31, 2023, i.e., 45 days after the petition date if the final order has not been entered or six months after the closing date or on the effective date of the plan or on the date of consummation of the sale of substantially all assets, whichever is earlier. Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out of $0.10 million towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor's collateral.

The proceeds of the DIP financing shall be used to fund for working capital and general corporate purposes of the debtors, to pay obligations arising from or related to the carve out, to pay allowed professional fees, to pay adequate protection obligations, and to pay fees and expenses incurred in connection with the transactions contemplated by the DIP motions. The Advisors appointed to DIP Term Loan Agent, Ropes & Gray LLP as local counsel, Counsel to the DIP Term Lenders, Akin Gump Strauss Hauer & Feld LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Glenn Agre Bergman & Fuentes LLP and their respective local counsel, the financial advisors to the DIP Term Lenders, Centerview Partners LP, Alvarez & Marsal North America, LLC and FTI Consulting, Inc, and counsel to the DIP ABL Agent and the DIP ABL Lenders, Davis Polk & Wardwell LLP, as counsel.