Donald Trump won $20 million in bridge financing Tuesday, banking sources said, allowing him to make a crucial bond payment by midnight and avoid the collapse of his cash-strapped real estate and casino empire.
Trump had huddled with his bankers for weeks in an effort to get fresh funds to meet his interest payments on his looming debts.
"The $20 million financing package gives Trump all the working capital he needs to avert bankruptcy," a banker said.
The bridge financing is part of an overall $65 million loan the banks were trying to arrange to help Trump meet his interest payments. Many banks that had loaned Trump money had been reluctant to sign onto the package.
With the $20 million secured, Trump now has another 30 days to complete the complicated deal to obtain the rest of the $65 million, a package that has involved negotiations with more than 50 banks worldwide.
The last holdout on the loan, Dresdner Bank AG, did not go along with the loan, but bankers said that they did not need the West German bank's support for the crucial $20 million bridge financing package.
The financing allows Trump to make an interest payment now 11 days overdue on bonds from the Trump Castle, one of the three casinos Trump owns in Atlantic City, N.J.
Trump faced a deadline of midnight Tuesday to make the payment or default on $351 million of Trump Castle bonds, thereby threatening his entire debt-laden empire.
The developer has been hit by a downturn in New York's real estate market and increased competition at his Atlantic City casinos.
The result has been a shortage of cash to cover his debts, which include an estimated $2 billion in bank loans and $1.3 billion in junk bond debt.
A declaration of default would have allowed creditors to seize various Trump properties used as collateral to back the bonds and other loans.
Trump also is overdue on a $30 million bank loan payment to a group led by Manufacturers Hanover Trust.
The new loan package reportedly would contain tough restrictions on how much Trump could spend on charitable contributions and personal and household expenses.
The loan package also reportedly requires Trump to stick to a business plan, hire a chief financial officer, adopt a system of accounting controls and change accounting firms.
Trump's main banks -- Citibank, Chase Manhattan, Bankers Trust and Manufacturers Hanover -- agreed to the restructuring earlier.