iPayment extends exchange, early deadline for 9˝% notes due 2019

By Susanna Moon

Chicago, March 8 – iPayment, Inc. extended the exchange offer for its 9˝% senior secured notes due 2019 until 11:59 p.m. ET on March 16.

The early tender deadline was pushed out until 5 p.m. ET on March 10 from 5 p.m. ET on March 7, according to a company update.

Tendered notes may now be withdrawn until the amended early deadline.

Under the exchange, iPayment is offering for all of the notes a total of $40 million in cash, cash for accrued interest, an additional $1 million in cash for those who tender by the early deadline, 90.5% of a new issue of preferred stock of iPayment Holdings and 90.5% of the common stock of iPayment Holdings.

As announced Feb. 16, the company and parent iPayment Holdings, Inc. are making the exchange offer to implement a comprehensive refinancing of the company.

Holders of 90% of the company’s 9˝% senior secured notes due 2019 have agreed to the exchange offer. These investors also own 57% of the company’s stock.

Existing stockholders will be able to either receive $1.31 per share in cash or alternatively to maintain their ownership, which will be diluted to a total of 9.5% of the company’s stock, and receive their share of 9.5% of the new issue of preferred stock.

Noteholders who participate in the exchange and who also own common stock will be required to waive their right to the cash option for their stock.

As part of the refinancing, iPayment, Inc. expects to enter into one or more new credit agreements. J.P. Morgan will arrange these loans.

The company’s existing credit agreement along with some other debt will be repaid. In addition, the indenture for the 9˝% notes will be amended.

Completion of the exchange is conditional on the arrangement of the new credit facility and the participation of holders of at least 95% of the 9˝% notes.

Settlement is expected late in the first quarter or early in the second quarter.

MacKenzie Partners, Inc. (800 322-2885, 212 929-5500 or proxy@mackenziepartners.com) is information agent and exchange agent.

iPayment originally announced a refinancing agreement with its noteholders on Jan. 17 but that was subsequently revised to reduce the cash payment to noteholders by $4 million and increase the equity value of iPayment Holdings by $11 million to $36 million from $25 million. Originally the cash payment was $42.5 million and the early tender premium was $2.5 million.

iPayment is a Westlake Village, Calif., provider of payment processing solutions.

© 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.