MoneyGram to launch $650-$675 million first-lien term loan on Tuesday

By Sara Rosenberg

New York, May 13 – MoneyGram International Inc. is scheduled to hold a bank meeting on Tuesday to launch a $650 million to $675 million first-lien term loan due May 2023, according to market sources.

Bank of America Merrill Lynch is the lead bank on the deal.

Official price talk on the first-lien term loan is not yet available. However, there are whispers that the debt may be talked around the area of Libor plus 525 basis points to 550 bps with an original issue discount of 99, sources said.

Proceeds will be used to amend and extend an existing first-lien term loan due March 2020.

Currently, there is about $900 million outstanding under the existing first-lien term loan, but, as previously reported, the company will repay $245 million of the debt with proceeds from a $245 million senior secured second-lien term loan.

The second-lien term loan has an annual interest rate of 13%, a portion of which would be payable in kind at the company’s option, as well as provide for customary fees and an original issue discount.

Bank of America arranged the second-lien term loan. BPC Lending I LLC, an affiliate of Beach Point Capital Management, has committed to provide $200 million of the facility, and the Carlyle Group, or an affiliate, will also participate in a portion.

Closing on the second-lien loan is conditioned on MoneyGram refinancing or extending its existing senior secured revolving credit facility and first-lien term loan.

The second-lien loan would mature upon the earlier of six years after closing or 12 months following the maturity date of the refinanced or extended first-lien term loan.

Upon closing of the second-lien term loan, the company would issue warrants to the lenders representing 8% of outstanding common stock, assuming full conversion of the company’s series D participating convertible preferred stock.

MoneyGram is a Dallas-based money transfer company.

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