iPayment restructures $525 million two-part note offering, sets talk

By Paul A. Harris

Portland, Ore., April 28 - iPayment restructured its $525 million two-part notes offering on Thursday, shifting $25 million to the operating company tranche from the holding company tranche, according to an informed source.

Price talk also surfaced on Thursday.

iPayment Inc., the operating company, upsized its offering of seven-year senior notes (B3/CCC+) to $400 million from $375 million.

Talk on those notes was set in the 10¼% area.

J.P. Morgan Securities LLC, Merrill Lynch and RBC Capital Markets LLC are the joint bookrunners for the operating company notes. UBS Securities LLC is the co-manager.

Meanwhile, iPayment Holdings, Inc. downsized its notes and warrants offering to $125 million from $150 million.

The notes and warrants units consist of 7.5-year senior payment-in-kind toggle notes (Caa1/CCC+) and 150,000 equity warrants.

The holding company notes are talked at 15%, half cash and half PIK. The warrants are expected to represent 2.5% of the company; discussions on the warrants ranged from 0% to 5%.

J.P. Morgan is the bookrunner for the holding company tranche.

In addition to the new structure and price talk, there were also covenant changes to the holding company notes, sources said.

The notes in both tranches come with four years of call protection.

The deal is set to price on Friday.

The Nashville-based credit- and debit-card transaction processor plans to use the net proceeds from the offering of the notes and the units, together with borrowings under a proposed new $375 million six-year senior secured credit facility, for debt repayment.

iPayment also plans to repay all of its existing senior secured credit facility borrowings, which totaled about $431.6 million as of Dec. 31.

iPayment will also redeem its existing 9¾% senior subordinated notes due 2014; the company sold $205 million of the notes in May 2006 and had $194.5 million outstanding as of Dec. 31, according to the filing.

The company also plans to use some of the proceeds to make a distribution to its indirect corporate parent, iPayment Investors, LP, which will enable the latter entity to redeem all of its existing PIK toggle notes.

Subject to the satisfaction of certain conditions, iPayment Investors also plans to redeem all of the equity interests in the limited partnership and its general partner held by Gregory S. Daily, iPayment's chairman and chief executive officer since 2001, and by entities controlled by him or in trust for his family members.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.